3 minutes
Delays and financial burden may affect your bottom line.
Sponsored by CUNA Mutual Group
Almost half of American workers say that financial challenges cause them the most stress in their lives. Part of this stress comes from concerns about saving for retirement.
Are your employees able to successfully save for a financially secure retirement? Are they prepared to retire on time? If you don’t know the answers to these questions—or worse, you know the answers are "no"—you could be costing your credit union. Not only can delaying retirement be a stressful situation for your workers, it may also negatively impact your bottom line.
Problems in Retirement Preparation
Concerning trends are emerging in employee retirement readiness. For example, less than half of workers are confident that they will reach their retirement goals. Even more alarming, 20 percent of those people said they don’t think they’ll ever reach their retirement goals.
Surprised? Your workers’ current financial situation may be the culprit. Some employees are so challenged by their current financial situation that they aren’t able to focus on saving for retirement. In fact, 42 percent of employees find it difficult to meet their household expenses every month. For these workers, saving for retirement might not even be an option.
Employee Financial Well-being May Affect Your Bottom Line
These trends in financial challenges not only affect the well-being of your employees, but also your credit union itself. 30 percent of employees admit that issues with personal finances have been a distraction at work. That’s nearly one in three employees worrying about or dealing with their personal finances during work hours. What does that equate to in wasted time? Nearly half of those who are distracted by their personal finance issues at work spend three or more hours per week distracted by these problems. That adds up to nearly a month of workdays each year.
What happens when these employees get to retirement age? Delayed retirements can also be costly for your credit union. A delay in retirement of just one year may cost employers as much as $50,000. That equates to paid sick and personal leave combined. Costs may be even higher when you consider qualities such as productivity as well as implications for promotion and advancement opportunities.
Are Financial Wellness Programs Enough?
Some employers who recognize these concerns have turned to financial wellness programs as an answer. 60 percent of employers said the importance of financial well-being has increased over the past two years, and nearly half of employers are in the process of creating a financial well-being strategy.
Financial wellness programs may be a great place to start, but unfortunately, these programs take time. Programs running one to two years have seen a disappointing 5 percent success rate. However, almost half of financial wellness programs running for at least 10 years were deemed successful.
So, what else can be done to help employees successfully save for retirement? An improved retirement education program may be a solution.
Retirement Education
Retirement providers are continually developing new approaches to education to better help your employees prepare for a secure retirement. 70 percent of employees feel anxious about figuring out how much money they need to save for retirement, and more than half of workers said that planning for retirement is harder than they expected. With a strong retirement education program enhanced with technology and new resources, your employees can do a better job at saving for retirement and anticipating challenges they may face.
Susan Reynolds is director of retirement solutions at CUESolutions provider CUNA Mutual Group. She can be reached at susan.reynolds@cunamutual.com.
