The economy is strong, unemployment is under 5% and wages are starting to climb. Yet with all this good news, employees who are closing in on those golden years are worried about retiring. Results of a recent study conducted by Brightwork Partners found that 38% of employees are delaying retirement, and, of this number, 52% say they have to in order to save more money.
So what can you do to help baby boomers? Start by providing financial education and communications to help them maximize their benefits and create a financial plan.
Most baby boomers don’t have a traditional pension plan at work, nor do they have fully funded health care or retiree medical insurance. So, employers can help baby boomers reach their financial goals by providing them a solid financial wellness program that emphasizes education. This can help employees learn how to be proactive about their financial health.
Research shows that after participating in financial education, 89% of employees take at least one step to improve their finances within 30 days. And on average, employees begin reducing credit card debt, reviewing their 401k plan and using retirement calculators to determine whether they’re saving enough.
A good financial education program should talk about:
- Other forms of saving. In addition to a company-sponsored 401(k), encourage employees to look at other forms of savings. This may include a health savings account, stable value funds, Roth IRA, stocks, bonds, annuities, real estate and home equity.
- Medical, life and retirement benefits. Health care is not cheap. The average retired couple (age 65) can expect to spend an estimated $543 a month on health care. This amount doubles by age 85.* To help offset future costs, encourage employees to find out whether they’re entitled to other medical, life or retirement benefits through a former employer.
- Social Security benefits. Boomers shouldn’t give up on receiving Social Security benefits yet, but they also shouldn’t solely rely on this to sustain their golden years. Employees can contact the Social Security administration to find out how much their anticipated benefit may be.
Any communications about your financial wellness program should encourage participation by telling employees why this matters to them:
- This is a valuable benefit.
- It offers unbiased financial advice.
- It can help you better prepare for retirement.
Financial wellness is huge again this year, and this is especially true when it comes to baby boomers. Compared to generations before them, boomers may be the wealthiest generation ever, but they’re also the most unprepared generation for retirement. Many find saving for retirement difficult because they’re supporting adult children burdened with student debt and caring for aging parents. The end-goal of your financial wellness program should be to make sure baby boomers gain a better picture of what their retirement looks like and create a financial plan to reach their goals.