Numerous recent surveys and research findings describe a dismal retirement picture for most American workers:
- 50% of working Americans plan to wait until age 70 to retire, or have no expectations of ever being able to retire.
- 2/3 of workers don’t contribute to employer retirement funds (401K plans, etc.), per US Census Bureau estimates.
- 20% of Boomers have NO retirement savings, and 40% have saved less than $100K. Not a recipe for retirement success for a generation reaching age 65 at the pace of 10,000 a day!
For employers, this trend of delaying retirement presents challenges and opportunities. On the positive side, this may slow down “brain drain” by helping retain workers with valuable experience, know-how and skills. Workforce shortages may be mitigated by older workers who stay and retirees who “boomerang” back into the workforce after formal retirement.
Conversely, a recent Prudential report describes the challenges employers face when employees delay retirement, including:
- Health insurance costs increase as expenses for workers aged 65+ are twice that of younger workers;
- Older workers earn more than newly hired workers, increasing overall payroll costs;
- Upward mobility opportunities for younger workers are stymied as is the timing of succession plans;
- Some employees with insufficient financial resources feel forced to delay retirement, and these individuals may be disengaged, negatively impacting productivity and innovation.
Employers can offset the negatives of delayed retirements by helping employees plan for retirement with strategies like:
- Provide easy access to retirement plan options
- Only 14% of all employers offer retirement plans!
- Educate employees about retirement planning
- Many employees lack the confidence and expertise to tackle retirement planning.
- Provide training on personal finances
- Employees who make better personal finance decisions are more likely to plan for retirement.
- Create flexible workplace options
- PT positions and “Gigs” ease employees into retirement and attract “boomerang” employees.
Want to improve your bottom line AND help your employees plan their futures? Here are some quick steps to get started.
Share these FREE U.S. government resources with your employees:
- Easily open a MyRA retirement account: https://myra.gov/
- Learn about Social Security benefits and retirement planning resources
Use MSEC resources, including:
- Surveys: learn what retirement plan options are offered by similar organizations
- MyFinancial Wellness: this online tool helps employees improve their ability manage their personal finances, including retirement
- ERISA: MSEC attorney assistance with compliance.
- ADEA (Age Discrimination in Employment Act): guidance to avoid non-compliance.
- Training: develop deeper understanding of effective multi-generational workplaces.
MSEC members, call us to discuss your unique situation and how we can help.