Why You Should Assess Employees’ Retirement Readiness

Posted by Brandon Conroy | November 7, 2018 | Thought-Leadership

The number of older Americans working in the US rose to 8.9 million in 2016, a 35% increase from the 6.6 million employed in 2011 (Bureau of Labor Statistics-BLS). The BLS projects this to be the fastest growing segment of the workforce through 2024.

Not surprising, older workers with college degrees have more opportunities to work into their later year. So, what does the BLS say are the top two occupations for older workers?

  1. Management (including legislators and executives)
  2. Sales

Older Americans are working in a variety of fields:

 

 

Advertising and marketing

  • Public relations
  • Computer and information systems
  • Human resources
  • Industrial production
  • Transportation and storage
  • Agriculture
  • Construction
  • Education
  • Architecture
  • Engineering
  • Food service
  • Funeral service
  • Gaming
  • Lodging
  • Medical and health services
  • Real estate
Sales Positions Held by Older Americans

  • Cashiers
  • Counter and rental clerks
  • Advertising
  • Insurance
  • Securities commodities and financial services
  • Travel
  • Wholesale and manufacturing
  • Telemarketing
  • Real estate

 

Why Are Americans Working Beyond Age 65?

Two factors are to blame:

  • Lack of finances
  • Increased life expectancy.

As I discussed in a previous blog post, The Changing Retirement Landscape and Retirement Readiness, three factors contribute to lack of financial preparedness:

  • Employers switching to a defined contribution plan
  • Decrease in Social Security
  • Decline in personal saving.

There are a variety of reasons Americans are saving less, including having to pay more out-of-pocket for their medical care.

There are a variety of reasons Americans are saving less, including having to pay more out-of-pocket for their medical care. – Brandon Conroy, Innovu Practice Director, Retirement Analytics

Employees Under Financial Stress Cost Employers More

One thing is clear—employees become stressed when they have financial issues. Financial stress is debilitating for both employees and employers, impacting:

  • Employee retirement readiness
  • Health
  • Absenteeism
  • Productivity
  • Better use of and understanding of employer benefits (i.e., HSA, health plans, 401(k) etc.)
  • Workers’ compensation

The graphic to the right shows health issues that can arise from financial stress.

What Can Employers Do to Help Prepare Employees for Retirement?

Employers are recognizing the need to help reduce financial stress for employees in order to improve their bottom lines. There are a number of approaches you can take to tackle the issue in your population. When you do, you will see results.

Financial Finesse published a 2016 ROI Special Report that discusses the approaches taken and the demonstrated cost savings realized by companies taking steps to improving employee financial wellness.

In one example, moving an employee with a financial wellness score of 4 to a 5 (on a 1-10 scale, with 10 indicating optimal financial wellness), shows the magnitude of savings through garnishments, FSAs and HSAs, and absenteeism.

 

 

A workforce better prepared for retirement will improve employee health, reduce your overall risk, and improve your bottom line. Is it time you had a retirement readiness assessment?

You may also be interested in:

Brandon Conroy
About The Author

Brandon Conroy

Brandon Conroy, ASA, FCA, MAAA, is a leader in developing and implementing new tools and strategies that reduce client risk. He’s developed and implemented an interactive healthcare cost projection model, underwriting templates, renewal presentations, IBNR tools, a health plan chooser tool, and financial wellness education models. Leveraging his actuarial consulting expertise in both health and retirement practices, he is leading Innovu’s efforts to build a Retirement Analytics solution to assess the financial preparedness of client populations.

Related Blogs

Posted by Sashi Segu | December 12, 2018
Recent News about Bundle Payments, Opioids, and Pharmacy Costs
I’ve recently come across several articles about topics my colleagues and I have written about in previous blogs this year. Since they were also some of our most popular efforts,...
Posted by Brandon Conroy | December 6, 2018
Healthcare Consumerism
Only a short time ago, consumerism in healthcare was not existent, like replay review in sports or Uber in the transportation industry. The reason for the lack of consumerism is...
Posted by Sashi Segu | November 29, 2018
The Impact of Hospital Mergers on Healthcare Prices
Hospitals have been merging for more than a decade. Supporters claim that these consolidations improve care coordination and lower prices. But do they? No, according to When Hospitals Merge to...