Your Employees' Financial Worries Go Way Past Retirement

Retirement is often seen as a time of relaxation. Yet, for many employees, the golden years are tarnished by financial struggles. Despite years of hard work and dedication to their jobs, retirees are forced to make difficult decisions about cutting back on expenses or returning to work.

It’s no surprise that financial worries top the list of retirees’ concerns. After all, retirement income is typically lower than what employees earn during their working years.

The shift from receiving regular paychecks to relying on fixed sources of income can be daunting for some individuals who have not properly planned for this stage in life.

However, employers and benefits managers have a unique opportunity to help alleviate these financial burdens through proper education and support.

By equipping employees with the knowledge and tools they need to make sound financial decisions during their working years and into retirement, companies can create a culture where retirees can truly enjoy their well-deserved time off without constant money worries looming over them.

In this article, we will explore why many employees face financial struggles after retiring and how managers and HR departments can make a difference by providing essential education on personal finance management.

The Retirement Financial Struggle

Several factors contribute to why retirees find themselves grappling with financial difficulties long after retirement:

Lack of Savings

One significant factor is inadequate savings during their working years. Many employees fail to save enough money for retirement due to limited knowledge about personal finance or poor financial planning – resulting in a smaller nest egg to rely on.

In addition, with the shift from traditional pension plans to 401(k) plans, employees must take more responsibility for their retirement savings. This can be challenging for those who are not financially savvy or do not have access to financial planning resources.

Medical Expenses

Healthcare costs continue to rise at an alarming rate, and retirees often face higher medical expenses while living on fixed incomes.

According to a study by Fidelity Investments, the average retired couple will likely need roughly $315,000 saved specifically for medical expenses during retirement¹ – a significant amount that can quickly deplete savings.

Inflation Rates

Lastly, inflation also plays a vital role in retirees' finances. The cost of goods and services doesn’t stop rising after retirement, making it difficult for fixed-income individuals to keep up with rising prices and maintain their desired standard of living.

The Role of Managers and HR Departments

Managers and HR departments play an essential role in supporting employees through proper financial education. 

By equipping employees with essential knowledge about personal finance management throughout their careers, companies can help them build strong financial foundations that will support them long after they retire.

To start, employers should consider implementing workplace programs dedicated specifically to educating employees on personal finance matters such as budgeting strategies or saving techniques. These may include lunch-and-learn sessions, workshops, online tools, or one-on-one financial coaching.

Companies should also offer access to retirement planning resources and guide how employees can make the most of their savings. This may include education on different types of retirement accounts and investment options, as well as advice on creating a diverse portfolio.

Additionally, regular check-ins with employees about their personal financial goals and overall well-being can help identify any potential issues early on and provide opportunities for necessary support or adjustments.

Employers could also consider offering financial wellness programs that include resources such as debt management assistance or access to financial counselors.

Benefits of Financial Education

Empowering employees with knowledge and resources to manage their finances effectively ultimately benefits both the individual and the company’s bottom line.

Employees who feel confident in managing their money are likely to be less stressed about their financial situation, leading to lower rates of absenteeism and increased productivity in the workplace.²

Providing proper education can also lead to more engaged employees who feel valued by their company. It communicates that employers care not only about their work but also about their overall well-being – creating a positive culture within the workplace.

Keep Reading: The One Employee Perk That Will Make Your Company the Most Competitive

When retirees have a solid understanding of personal finance management principles during retirement, they are better equipped to make sound decisions regarding budgeting and handling unexpected expenses. This can help alleviate financial stress and allow them to enjoy their retirement years as intended.

Support Your Employees With Enrich

A strong financial education can be the difference between retirement as a time of relaxation and constant financial worry. With the Enrich Employee Financial Wellness Program, employers can provide their employees with the necessary tools and resources to make informed financial decisions throughout their careers and into retirement.

Enrich offers a comprehensive, customizable platform that includes educational articles, videos, calculators, and budgeting tools – all aimed at equipping employees with essential personal finance knowledge.

In addition, our team of experts is available for one-on-one consultations to address any specific concerns or questions regarding retirement planning.

Contact Enrich for a demo today, and see how the financial wellness platform can make a positive impact on your company’s culture.

1 - https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs

2 - https://graystone.morganstanley.com/the-parks-group/articles/graystone/thought-leadership/financially-stressed-employees