The Choice Isn’t Always Yours To Make

Older workers may think that a lack of retirement funding can be overcome by working longer, but that option isn’t always available to the employee.  Paula Aven Gladych recently reported in Employee Benefit Adviser on a recent study conducted by Transamerica’s Center for Retirement Studies that highlighted the fact that nearly three-quarters of employers think that they are “aging-friendly”, but unfortunately, most haven’t put in place procedures or policies to actually implement this objective.

According to the study, “only 39% of employers offer flexible schedules to pre-retirees, and even fewer allow pre-retirees to change from full-time to part-time positions or take on less stressful or demanding jobs with the company.”  Amazingly, only 27% of employers encourage pre-retirees to participate in succession planning, training and mentoring before they leave the company. What a waste of experience.

Why should an employee find this study disconcerting? With the demise of the traditional DB pension plan for the private sector, most employees will have to contribute earlier in the process, while also contributing more in order to actually generate a commensurate retirement benefit through a defined contribution offering.

Not surprisingly, this isn’t happening, and it isn’t likely to happen anytime soon, as higher paying jobs are hard to find in this economic environment, and our younger generation is often burdened with greater demands on their salaries from items such as student loan debt, higher medical insurance premiums, and greater housing expenses to name just a few.

So, if you find yourself a participant in a DC plan, please “pay” yourself first so that you can create a retirement account that might actually allow you to retire at a more normal age without having to count on the support of your employer to “permit” you to work longer.

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