The Retirement Reshuffle is Impacting Employers

Across the nation, more and more workers are expecting to postpone retirement. In fact, a survey by the Nationwide Retirement Institute shows that 40% of older employees plan to retire later than anticipated because of inflation. And delays don’t just affect employees — more than a third of employers are concerned about increased health and benefit costs, negative impacts on their staff’s mental health, and barriers to hiring new talent.

Employers Can Help

If you sponsor a retirement plan, you’re already doing something important to encourage employees to retire comfortably and on time. And if it’s part of an overall financial wellness plan, that’s even better. However, while 68% of American workers have access to a 401(k), only 41% are actively contributing to it. Working with your advisor can help you design the right benefits package for your organization — and find ways to increase participation and contribution rates through access and education.

Tailor Your Plan Design

Some organizations are turning to guaranteed lifetime income investment solutions to address this issue but several factors may weigh against adding them to a plan’s lineup. These include potentially higher fees, employee knowledge barriers, the need for early participant adoption to provide sufficient income, vulnerability to inflation, and disadvantages for beneficiaries in the absence of any death benefit. Fortunately, there are many other levers plan sponsors can pull to encourage employees to save enough to retire, such as adding auto-enrollment and auto-escalation features. Increasing your match and actively encouraging workers over 50 to take advantage of catch-up contributions can also go a long way toward helping participants make up for shortfalls.

Think Broadly

Offering an HSA gives employees another vehicle for retirement planning and saving for health care expenses. Allowing phased retirement options, sometimes referred to as “pre-tirement” — with reduced hours leading up to full retirement — can also help. Additionally, robust omnichannel financial wellness programming and employee assistance programs (EAPs) can help workers prepare for retirement and better maintain mental and emotional health in the face of economic stressors.

Helping Workers Helps Your Bottom Line

If the trend toward delayed retirement continues, impacts could be felt far and wide. It’s important for employers to be proactive in helping employees retire comfortably to save on health and benefit costs and more easily usher in new talent. And if your workers are confident in their ability to meet their financial goals, they’ll be happier — and more productive — while they’re still part of your workforce.

Sources: https://news.nationwide.com/companies-struggle-to-hire-promote-amid-uptick-in-delayed-retirements https://www.personalcapital.com/blog/retirement-planning/average-401k-balance-age/ https://www.napa-net.org/news-info/daily-news/has-interest-grown-guaranteed-lifetime-income-options
Advisory Services offered through The Ascent Group, LLC, an SEC-registered investment adviser. Securities offered through Triad Advisors, LLC, Member FINRA/SIPC. The Ascent Group, LLC; Alera Group, Inc.; Summit Group of Virginia, an Alera Group Company; and Summit Group 401(k) Consulting, an Alera Group Company, are not affiliated with Triad Advisors, LLC. Representatives do not provide tax or legal advice. Please consult with your tax advisor or attorney regarding your situation. 

You are now leaving Summit Group 401(k) Consulting

Summit Group 401(k) Consulting provides links to web sites of other organizations in order to provide visitors with certain information. A link does not constitute an endorsement of content, viewpoint, policies, products or services of that web site. Once you link to another web site not maintained by Summit Group 401(k) Consulting, you are subject to the terms and conditions of that web site, including but not limited to its privacy policy.

You will be redirected to

Click the link above to continue or CANCEL