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Recipe for Success: Employers, Employees Collaborating on Retirement Planning

By Joe DeSilva, Senior Vice President/General Manager, ADP Retirement Services

With National Save for Retirement Week underway, it’s a good time for employers to consider the retirement benefits they offer their employees. Today’s workers are concerned about their retirement savings and the recession of 2008 has re-shaped their views.

ADP recently published a whitepaper, “More Participants are Delaying Retirement,” that takes the pulse of employee retirement saving. With employers increasingly focused on providing financial wellness and literacy programs to their employees to encourage early savings, these findings can help employers better understand the concerns employees have as they look toward their financial future.

The study sheds light on two key questions for employers to consider: Do employees feel like they are saving enough? Do they believe they’ll hit their investment goals?

According to the study, American workers still believe that they are not saving enough for retirement even though the economy is improving.[1] What might have started as a reaction to the recession is now a reality that shapes how American’s want to save for retirement and how employers can help. Specifically, American workers increasingly see delayed retirement as the new normal. Over the past 12 months, 38 percent of workers have considered delaying retirement beyond the original age they intended, and 52 percent of respondents say they will delay retirement because they “need to save more.”[2]

Interestingly, employees’ views that they need to delay retirement spans all income levels. Forty percent of respondents earning between $50,000 and $100,000 expect to delay retirement, while 37 percent of those earning less than $50,000 and 37 percent of those earning more than $100,000 also expect to delay it. However, the greatest increase in is among Millennials. The number of employees between 18 and 34 who are considering delaying retirement has increased 15 percent from 2010, while the number of those between 35 and 49 who are thinking of delaying their retirement has only increased 7 percent.[3]

These growing retirement concerns provide an opportunity for employers to demonstrate their dedication to the financial wellness of their employees. Financial wellness programs can be beneficial to employers and employees alike, because such programs can help to increase employee engagement and productivity. From the research, it’s evident that employees are concerned that they have not saved enough for retirement; such personal financial stress can find its way into the workplace. According to a recent study “Winning with Wellness,” financial worries can preoccupy even the most committed employees, taking a toll on morale and productivity.[4] The good news is that employers can help employees lay the groundwork for smart retirement planning.

Employers have the opportunity to provide early, valuable guidance and assistance around retirement and financial wellness to reduce their employees’ worries and help prevent delays in retirement. Some 86 percent of employers say their goals for offering financial wellness planning arise from concern for employee well-being, while 60 percent offer it to reduce employee stress.[5] Offering financial wellness programs can be a great way for employers to help their employees assemble the building blocks for a secure retirement tomorrow, while reducing stress and increasing employee engagement today.

[1] “More Participants are Delaying Retirement”, ADP, 2016

[2] “More Participants are Delaying Retirement”, ADP, 2016

[3] “More Participants are Delaying Retirement” , ADP, 2016

[4] “Winning with Wellness”, ADP, 2016

[5] “Winning with Wellness”, ADP, 2016

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