According to a new participant survey by J.P. Morgan Asset Management, 43 percent of participants intend to “wing it” in retirement, “planning to figure out how to live off of whatever they have saved when they decide to retire.” While this is not the only disturbing statistic to come out of the survey, it’s hard to be surprised anymore to learn about American workers’ unpreparedness for retirement.
The J.P. Morgan survey, though, points out something that we tend to lose sight of amidst the stories of confused participants. The issues facing American workers, like the prospect of delayed retirement and debt pressures, also impact employers. Plan sponsors will need to plan for an older workforce as more employees delay retirement. As the survey says, “many employers will have the benefit of a more tenured, experienced workforce but may also have to balance their accumulated knowledge with a potential rise in older workers’ benefit and health care cost.” Also, employees who are overburdened with financial worries can experience stress that affects their work performance. “Financial pressures – which are also affecting worker productivity — are one of several factors hampering people’s ability to save for retirement.”
This knowledge can help to remind plan sponsors of why their efforts toward helping employees reach financial goals count. The survey concludes by suggesting that employers take a more holistic view of workers’ financial health: “Given the interconnectedness of individuals’ physical, emotional, environmental and financial well-being, plan sponsors should take a broader look at their participants’ needs and ‘financial wellness.’ By doing so, companies can expand the range of financial advice and solutions in the workplace, ultimately helping to improve productivity.”
Source: “2013 Plan Participant Survey Findings: Searching for direction on the journey to retirement,” Retirement Insights, J.P. Morgan Asset Management