When it Comes to Retirement, Some Employers Just Don’t Get it

It’s very amusing how utterly clueless most employers can be about the challenges and wishes workers have regarding matters of retirement. A good number of employers are out of the loop when it comes to how bad many of their older employees’ financial circumstances are, and that many of their employees who are in their 60s need to keep working either part or full-time, so they really need some sort of guidance on how to transition into retirement.

A retirement consultant at Willis Towers Watson, Lauren Hock said, “A retirement income stream from a 401 (k) or pension is just one of the dozens of decisions you make as you retire and just focusing on that is missing the bigger picture, we know that retirement as it is a financial decision it is also a physical, social and emotional decision.

Retirement Preparedness – One in five employers think that their employees, as soon as they qualify for retirement benefits, will retire. This was according to a survey which also showed that 71% of employers have the notion that older employees have enough funds to retire whenever they decide to.

A global benefits attitudes survey of American workers conducted in 2017/2018, showed that among those surveyed more than a third said that due to financial reasons they expect to retire after they hit 70 and 55% said that as soon as they can afford to, they will retire.

For a lot of them the reality of living paycheck to paycheck, the great recession and lack of savings that won’t be happening any time soon. A quarter of adults who are 62 and older are insecure financially. This is according to the Federal Bureau of Consumer Financial Protection. In 2018, 68% of U.S adults experienced a set-back in their finances that were very unexpected. This was discovered in a new poll by the National Endowment for Financial Education. 48% of Americans aged 56 and above and earning $60,000 a year are concerned that they will be devastated financially if they have one costly trip to the ER.

56% of retirees surveyed by Transamerica said that due to health problems and job losses they were forced to retire sooner than actually planned which is another harsh reality.

Counseling Sessions – bringing in an expert to hold one-on-one counseling sessions on matters retirement is a move that would help not only the older workers but employers as well. It was found that only 6% of retirees said that the employers played a part by offering financial retirement counseling and 5% held education about transitioning to retirement or seminars.

Phased Retirement Programs– another thing employers could offer is the phased retirement option. 47% of workers said that they would be interested in phased retirement in that they can for example slowly reduce working hours to part-time from full-time.

Employer worries about brain drain from retiring and fight labor market may make phased retirement a tad bit more common in coming years. 23% of employers in the Willis Towers survey said that by 2020 they expect to offer phased retirement programs.