Workers globally and in the U.S. expect they will need 67% of their current income in retirement, yet relatively few believe they are on course to meet these needs.
The New Social Contract: Age-Friendly Employers from Aegon Center for Longevity and Retirement (ACLR) and Transamerica Center for Retirement Studies (TCRS) explores the role employers play in helping workers prepare financially for retirement, a role that has become even more crucial (albeit precarious) amid the coronavirus pandemic.
“Retirement systems around the world are undergoing severe strain due to increases in longevity, population aging, globalization, and evolving employment trends,” TCRS president and CEO Catherine Collinson, said in a statement. “The coronavirus pandemic and economic downturn are intensifying existing risks to retirement security—and creating an even greater urgency for a new social contract among governments, employers, individuals, and other stakeholders.”
The survey findings identify ways employers can support their employees to extend their working lives and financially prepare for retirement. The following are options to consider now and in the future as the broader economic picture improves.
Cultivate an age-friendly workplace
When asked about initiatives their employers have in place to encourage a multigenerational workplace, only 32% of workers globally (37% U.S.) indicate their employer has an age-neutral workplace; 27% globally (30% U.S.) say their employer has a supportive work environment, and 25% globally (30% U.S.) say their employer has an inclusive culture.
Provide benefits with portability in mind
52% of workers globally are offered a retirement plan by their employer (66% U.S.). 58% of workers globally agree with the idea that a “job for life” is a thing of the past (61% U.S.).
Offer retirement planning, financial advice
Only 17% of workers globally have a written retirement strategy (31% U.S.)—and 35% have a backup plan in the event they are unable to continue working before they reach their planned retirement age (43% U.S.).
Promote financial literacy, training, education
Only 28% of workers globally could answer all the “Big Three” financial literacy questions developed by leading academic experts Drs. Annamaria Lusardi and Olivia Mitchell that test knowledge of compounding interest, inflation, and risk diversification (30% U.S.).
Encourage health, well-being in workplace
More than eight in 10 workers are interested in one or more types of workplace wellness programs (86% global, 84% U.S.). The most often cited types include exercise programs (35% global, 41% U.S.), healthy food or snack options at the office (35% global, 40% U.S.), and financial incentives for focusing on health and wellness (32% global, 36% U.S.).
Offer flexible work arrangements
Globally, 50% of workers report having flexible working hours (55% U.S). Only 28% of workers indicate their employers offer pre-retirees the option to move from full-time to part-time work while phasing into retirement (27% U.S.).
Help workers keep job skills current
Almost three in four workers globally and in the U.S. (both 74%) are offered one or more types of training to help them keep their skills current and to remain employable in the future. Twenty-four% are offered reimbursement for continuing education (29% U.S.).