What Happens When 40% of Workers Defer Retirement? We’re about to find out

More Americans 45 and Older Transmitting Their Goal the retirement Beyond that area thanks to the high cost of living. This is bad news for young people and employers.

40 percent of American workers age 45 and older said they are postponing their retirement amid inflation, according to Research Published this week by the Nationwide Retirement Institute, the retirement insights group. That’s twice as many older workers delaying retirement as last yearan increase with consequences for younger workers and businesses as an aging workforce hampers the hiring process.

Consulting agency Edelman Data and Intelligence collected data for the NRI study using a survey of 1,700 stakeholders conducted online in July and August.

The workforce impact of late retirement

More than a third of private companies surveyed said that late retirements hamper their ability to hire new talent, and 34% responded that hiring new young talent in particular becomes more difficult as the retirement age increases.

“We’re seeing delayed retirements impact the entire talent lifecycle of employers, and may inadvertently contribute to a ‘quiet take off’,” said Amelia Dunlap, Vice President of Nationwide Retirement Solutions in a press release.

Health insurance and benefits plans are also becoming more expensive for companies with fewer older employees retiring, 35% of companies said — and the cascading effect is affecting the well-being of other employees.

“Employers may find themselves with a workforce that lacks the incentive to go further without the ability to reward employees for good work,” Dunlap said.

Three out of 10 employers said the consequences of workforce advancement include lower team morale, and roughly the same amount said employees’ mental health was negatively affected. Just over a quarter of companies (27%) also noted low productivity.

Younger employees feel lost when it comes to retirement

The survey found that retirement pressures reach younger employees, too. Overall, less than 60% of employees feel positive about their retirement plans, and more than that (66%) say inflation is the main reason.

Workers between the ages of 35 and 44 were more likely to express confusion (21%) and panic (16%) than their colleagues over the age of 45.

Public and private sector retirement positions

The NRI also found that employees in the public sector – where employees tend to earn less but receive better compensation, according to National Institute for Retirement Security More optimistic about their retirement plans. And compared to the 41% of private sector employees who said they plan to postpone retirement due to inflation, only 28% of public sector workers said the same.

Government employees overwhelmingly feel they are on a stable financial path to retirement: 75% said they are on the right track, while more than half (56%) of private sector workers said they are financially ready for retirement. .

Workers want lifetime income options

Amid the precarious retirement outlook, both employees and companies have said they are interested in it Lifetime Guaranteed Income Strategies Cross-Annuities: Insurance contracts that allow employees to convert a portion of their retirement savings into a predictable lifetime income stream.

In other words, an annuity that produces lifetime income allows employees to convert some of their retirement savings into a steady income stream. More than half of the employees surveyed in the NRI study said they were interested in these strategies, and 41% said they would likely change their retirement savings to a guaranteed lifetime income option if given the opportunity.

Both public and private employers love the idea: 69% of private companies and 70% of public sector employers want to add guaranteed lifetime income options to their retirement plans.

The survey found that a lack of education about other retirement savings strategies hampers businesses and employees. While more than half said they would like to explore lifetime guaranteed income options, only 22% said they are already aware of them. More than 40% of employees and 38% of plan sponsors said a lack of knowledge was the primary factor in not contributing to lifetime guaranteed income strategies.


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Retire With Money brings the latest retirement news, insights and tips to your inbox. Elizabeth O’Brien has covered retirement for over 10 years.

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