How to Help Employees Stay on Track for Retirement

This year marks a milestone for the U.S.: More Americans will reach the traditional retirement age of 65 in the same year than at any time in history. According to the U.S. Census Bureau’s population projections (as cited by Investor’s Business Daily), about 12,000 people will turn 65 every day this year. That’s about 4.4 million people. In times past, this would be the year that those 4.4 million people would have given their employers notice, enjoyed a party given in their honor, and blissfully walked into the sunset of retirement. However, that is not a realistic scenario these days. Many older Americans are working beyond the age of 65 ─some by choice, some out of necessity. It seems that 65 is no longer an absolute retirement age. Those born at the end of the baby boom won’t reach Social Security’s full retirement age until they’re almost 68 years old! Full retirement age is when recipients become eligible for unreduced Social Security retirement benefits. 

Those who continue to work beyond the age of 65 out of necessity face the challenge of possibly not having enough money to live comfortably throughout their retirement years. People are worried that they won’t have enough money for the basic things in life ─housing, food, health care, etc. One of the biggest threats to financial security in retirement for most people is longevity. Over time, life expectancy has improved, and according to this chart, today’s 65-year-old can expect to live at least another 15-20 years. Although this is good news, it is also a cause for concern for many. According to this article. a recent survey conducted by the Alliance for Lifetime Income, related to the “graying” of the U.S. population trend (also known as the Peak 65 trend) found that 51% of Americans between 45 and 75 don’t feel they have enough retirement savings to last their lifetime. And more than a third aren’t confident they’ll have the funds to cover their basic monthly expenses in retirement. Adding fuel to the fire are the numerous reports that indicate the possibility of the Social Security system running out of money by the year 2033. 

Employees who are at or nearing retirement are concerned. According to this article, 56% of Americans say they’re not on track to comfortably retire. Should employers be concerned also? What if you have employees who refuse to retire? Can employers implement mandatory retirement policies? This article suggests employers “think long and hard before implementing a mandatory retirement policy – because chances are it’s illegal.” Are employers obligated to assist employees in managing retirement funds now (for those who still have time to save)? The previously mentioned article contends that employers can play a crucial role in helping employees stay on track for retirement by providing them with information and resources. The article offers several ways employers can help employees plan better for their future. Efforts might prove too late for those who want to retire this year. However, if employers provide educational resources ─perhaps some financial counseling or online planning tools─ to assist both those who have many more years to work as well as those who want to retire relatively soon, all employees can reap the benefits.

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