Because of inflation, rising health care costs, and employers’ need for talent, people are retiring later and later in life. According to a recent CSNBC article, the average age people say they hope to retire is 62, however, Social Security just moved that age to 67 and could go beyond that in the years to come.
Whether adjusting pay, retirement contributions, or benefits offsets for care, people that want to retire will need to not only plan but to enact a plan now to protect themselves down the line. We have learned from other countries, our internal retirement system, and history that no one system or plan can properly address the costs of care and day-to-day living in retirement.
In most countries around the world, the elderly live with family and are reliant on them for care, which can be a financial strain on those families’ income. In the United States, most people think of retirement along the lines of a retirement community or an “old folks home”, but that has an ever-increasing cost and quality of care issue. The longer you wait to retire, the more of life’s adventures you could miss. So, what are the employees that are looking to retire soon (or planning for retirement) to do?
If they stay working and remain on employers’ plans, costs are sure to go up as the demand and cost for care continue to rise. According to a new report from RBC Wealth Management, the expected lifetime cost for care for a healthy 65-year-old will be $404,253 due to inflation. If they retire early, they are taking a pay cut and have to ensure their savings can take on the day-to-day costs for the remaining years of their life.
If laws like this continue to pass, it will provide more hard decisions for our elderly to consider. Now is the time for employers to get wise and look at how they plan to take care of their older employees, and their benefits budgets to properly protect them for their future. Elderly benefits are on the rise and some intelligent programs are continuing to emerge, it’s best to get ahead of it than fall behind losing top talent to competitors.
As an employer, you would be smart to capture the talent and knowledge of our older generations and keep them in your company. Find some help for those who want to retire but can’t and fill the gap left from the “Great Resignation” with those who want to delay their retirement.
