Employers need to encourage their employees to think about their retirement income now more than ever. According to experts in the field, employers need to help employees reframe their thinking with regard to income streams and retirement savings, preparing them for a realistic future. Furthermore, employers should be assessing their employee engagement systems and encouraging their younger generations of workers to think about retirement sooner rather than later.
Employees most likely want to be able to retire on their own terms when the time comes, yet few have properly planned this process and know whether or not they can afford it. A big step toward being able to retire comfortably involves converting retirement savings into retirement income, and employers are being encouraged to educate their workers on lifetime income products, helping them to retire at a reasonable age without having to worry about a lack of consistent income.
Although their generation is far from retirement age, millennials are continually interested in these employer-derived retirement schemes, especially considering the somewhat unstable nature of social security and how it could change in the decades to come. Gen Xers and Baby Boomers have arguably had much “safer” retirement options and social security funds compared to millennials, who are now left to fend and save for themselves.
As a result, annuities are becoming an attractive option because the younger generations don’t have an obvious lifetime income coming their way as they get older, in contrast to their parents and grandparents. As a result, employers are being encouraged to educate these younger workers on retirement plans which put tools in place to help workers estimate and measure income replacement in several decades’ time.
A Lack of Action
Financial services company TIAA has found that nearly 70% of employers think it is useful to provide their workers with education on finances, yet only one-third of this 70% actually do provide such education. Other companies stated that they would specifically offer financial education for female workers, yet less than 15% offer that too.
Employers should ideally provide their teams with financial information which is based on different demographics and data such as genders, ages, and life stages, as there is obviously no one-size-fits-all solution if you have a diverse workforce. TIAA continues to press employers on retirement, encouraging aspects such as gamification in order to intrigue staff (particularly of younger generations) and get them thinking about how they’re going to plan for their retirement, no matter how distant it may seem right now.
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