When your employees think about retirement, are they filled with excitement about days spent travelling and gardening or with worry about how they’ll afford to pay for their home, healthcare expenses, and other needs? This should be a joyous time in the lives of those who have spent years dedicated to working, but for many Americans the costs and other needs associated with retiring may seem overwhelming. Here are three common retirement concerns every employee has – and how you can help them overcome those worries to plan for an easier transition to life after work.
The single most common concern individuals have about retiring is their ability to afford it. With the average American male living to 76 years old and females living until 81, the prospect of funding decades of retirement is a daunting one for many workers.
As an employer, you can provide your employees with access to unbiased financial planners and educators to help them prepare to retire. For example, are your employees aware that waiting to retire can increase their social security benefits payments? Employees who retire at full retirement age receive 100% of their benefits payment, but waiting just a few years can increase their benefits by up to 32%. Over the full course of their retirement, that 32% can be a significant amount.
The single biggest benefit that employers can provide to their employees is a 401(k) retirement plan. Every contribution that the employee makes to their 401(k) plan entitles them to a tax deduction. 401(k) plans are a convenient and easy way for your employees to save for their retirement. Employees’ contributions to their plans are automatically deducted from their paycheck and deposited into their retirement account, making 401(k) plans a crucial component to the success of any employee’s retirement goals. Check out 401(k) Retirement Plans to learn more.
With retirees living longer, health care costs are another major concern for those thinking about or planning for retirement. While in the workforce, many employees have access to employer-sponsored healthcare programs, but who pays for all those medical costs after retirement?
Employers should consider offering employees access to unbiased healthcare advisors who can help them make decisions about participating in age-related programs like Medicare and Medicaid. These government-sponsored program allow retirees to offset the costs of health care expenses during retirement.
Employers can also help prepare their employees to manage health care expenses after retirement by offering a Health Savings Account (HSA) option. These accounts allow employees to save for future healthcare costs tax-free and the funds aren’t taxed when used for eligible purposes. Some employers opt to match contributions up to a certain limit, helping employees save even more for future medical costs. The best part? HSAs are portable, so your retiree can take the plan with them when they retire. Check out Are You Maximizing Your HSA Benefits to learn more about HSAs.
Weighed down by debt
Financial debt amongst those nearing the age to retire is growing faster than ever before. In 2015, the average 67-year-old had 169% more debt than his 2003 counterpart and overall debt has increased by about 60% for all borrowers between 50 and 80 years old. How can your business help employees plan when debt seems to be piling up endlessly?
Worry about debt can be a drain on the ability and will of many nearing the end of their working life to actually retire – and it can be a source of lost productivity among younger workers too. When employees are stressed about financial issues, it can become increasingly difficult to focus on work tasks. Financial wellness programs offered by employers can help employees of any age become better educated about their finances and learn how to reduce debt and plan long-term for life changes, including retirement. Learn more about the importance of financial education in the workplace by reading Benefits on the Rise: Financial Wellness Programs.
Plan administration you can trust
Planning can seem like an overwhelming task for many individuals, but you can help make the transition easier by offering the right mix of benefits and education programs. Sheakley Retirement provides individual retirement account support for small to medium-sized employers. It starts with a consultative meeting to determine the plan design that best meets the needs of the business and its employees. We’ll then manage the retirement planning services, ensuring a simple, efficient and successful 401(k), profit sharing plan, or other programs.
Learn more about Sheakley Retirement and contact us for your free consultation today. Stay up-to-date on all things Sheakley by subscribing to our blog and following us on social media. Join in the discussion by commenting below.