Yahoo Finance 2 big reasons our bosses should care that we’re not saving for retirement
Financial stress kills our productivity.
We all know it’s tough to save for retirement today. Somehow, workers will have to save more for retirement than previous generations, all while dealing with the pressures of student loan debt, stagnating wages and rising fixed costs.
Some workers are cracking under that pressure, new research by PwC shows. Nearly half of 1,600 workers surveyed said they’ve saved less than $50,000 for retirement. Almost the same number of workers said they will probably have to tap their nest egg to cover unexpected expenses before they retire, driving them to prolong their working years.
Stats like these shouldn’t just trouble individual workers. Here are two reasons employers should be worried, too:
It’s killing their productivity.
Twenty-eight percent of workers admitted money problems have distracted them during their working hours, up from 20% in 2015. Nearly half of workers said they devote three working hours or more each week handling financial issues, up from 37% last year. Younger workers are the most likely group to be distracted at work. More than one-third of millennial workers this year said they worry about meeting their monthly expenses, up from 23% in 2015. Considering millennials make up the majority of the workforce today, employers should pay attention.
It makes it a lot tougher to attract new talent.
The less confident workers are in their ability to retire, the more likely they’ll stick around at their jobs. In PwC’s survey, more than half of boomers said they plan to retire later than they originally planned, compared to 44% of Gen Xers and 32% of millennials. The primary reason? Not saving enough. And when older employees stick around, it becomes harder for employers to attract fresh talent. “You’ve got older employees, less productive, less healthy employees hanging around longer and that isn’t a good solution for the employer,” says Kent Allison, head of PwC’s employee financial wellness practice.
What can be done?
The bottom line is it’s not enough to encourage workers to save for retirement while ignoring all the roadblocks that stand in their way. For years, we’ve seen employers shift away from programs that help ease the financial burden of their workers, like 401(k) matching contributions and employer-provided health care plans (to counter some of these developments, the federal government has delivered programs like the Affordable Care Act and MyRA, where workers can save for retirement if their employers don’t offer a dedicated plan). Only 3% of employers offer some kind of student loan repayment assistance program now. The U.S. is still one of the only developed countries that doesn’t require paid maternity and paternity leave for workers.
These trends should be reversed. Already, a few major corporations are leading the way. The question is whether others will follow suit.
