4 ways to help workers prepare for retirement
- Findings from the Transamerica Center for Retirement Studies (TCRS) show that 69% of employers believe it's possible to work until 65 and still not have enough retirement savings, "a disturbing finding given the vital societal role that employers play in helping workers save, plan, and prepare for retirement," the group said.
- All About Retirement: An Employer Survey asked 1,800 employers how they think workers see themselves in retirement. It also asked about the business practices in place to support workers and the current status of the retirement benefits offered.
- TCRS recommends that employers help workers achieve retirement security by: (1) having an aging-friendly workplace; (2) allowing employees to work past 65; (3) adopting a flexible retirement program that phases in retirement; and (4) enhancing retirement and employee benefits by such means as extending retirement plans to part-time workers, offering Roth 401k options, providing automatic enrollment and offering assistance with managing savings.
The study's findings confirm what many other surveys have shown: U.S. workers generally haven't saved enough for retirement. Despite good news from a recent Fidelity Investments' analysis, which showed average 401k account balances to be $97,700 and average IRA account balances to be $100,200, workers overall aren't putting away enough savings for a secure retirement.
Employers in TCRS' survey envision workers staying in the workforce to at least 65. And a CareerBuilder study found that a third of employees 60 and older plan to work to at least 70; about 20% said they don't think they'll ever be able to retire. More than half of the respondents (51%) in the Addison Group’s Third Annual Workplace Survey released in March also were worried about not being able to retire.
To address these concerns, TCRS first suggests that employers offer an aging-friendly workplace. This could involve adopting inclusive practices, programs and benefits that recognize age with other demographic factors, the group said. Employers also should permit phased retirement, according to TCRS. Few companies have such a program in place, but it can help employers optimize workforce management and succession planning while also generating good will among employees. Finally, the group recommends enhanced employer-sponsored retirement benefits, which it says is one of the most effective tools to help workers save, invest and prepare for retirement.
- Transamerica Center for Retirement Studies Missed Opportunities: Four Ways Employers Can Promote Retirement Security