Today many companies are grappling with the Great Resignation, primarily with employees ages 30 to 45 years.
However, a new Nationwide Retirement Institute® survey of retirement plan sponsors and participants uncovered the Great Resignation doesn’t necessarily apply to older employees, with one in four employer-sponsored retirement plan participants ages 45 and older reporting that the pandemic has caused them to push back their retirement or prevented them from ever retiring at all.
This is even higher for participants 65 years and older at 30%. On average, plan participants who say they will delay their retirement expect to work for at least three years later than they thought they would prior to the pandemic.
These delayed retirements have had a direct impact on these employees’ happiness at work and likely business outcomes for their employers.
- Nearly half of surveyed plan participants (48%) report feeling frustrated
- 42% are worried
- 38% are sad
- 17% feel hopeless
These emotions are bleeding into their work life, with plan participants indicating their delayed retirement has negatively impacted their mental health (48%), morale at work (39%), and productivity (23%). What may be more concerning is many companies aren’t aware of these repercussions. Less than a quarter of plan sponsors surveyed have recognized these issues in their workplace.
“While many companies are focused on attracting and retaining talent during the Great Resignation, there is another group of their employee base that needs attention in order to transition out of the workforce,” said Amelia Dunlap, vice president of Nationwide Retirement Solutions marketing. “It’s clear delayed retirements can foster negative emotions, which can be detrimental to a company’s culture and bottom line. Employers should look to invest in the short-term and long-term financial planning solutions that help employees reach their financial goals and prepare for the retirement they want, when they want it. Doing so may not only help those who are ready to retire, but potentially serve as a reason for younger talent to stay with the company.”
One of the long-term planning solutions plan sponsors could consider to help employees retire on time is offering guaranteed lifetime income investment options for participants. In fact, about half (46%) of plan participants are interested in these options. Eighty-one percent of plan sponsors acknowledge their employees want this, too.
Forces causing older workers to consider delaying their retirement are driven by uncertainty in how their retirement savings will translate to retirement security. Half of participants are worried about market volatility (51%), managing lifestyle and expenses (50%) and outliving their income (48%) in retirement.
“With long-term financial security top of mind for employees, guaranteed lifetime income investment options within an employer sponsored defined contribution plan can help them grow their retirement savings with the confidence that they can generate income they won’t outlive in retirement,” continued Dunlap. “To get started, plan sponsors should work with their plan advisor or consultant to identify which option is right for their plan participants and benefits mix.”
Nationwide offers a list of considerations to help plan sponsors, consultants and advisors get conversations about in-plan guarantees started, as well as additional resources for advisors and consultants.
Nationwide Retirement Solutions administers nearly 34,000 retirement plans, protecting more than $173.9 billion in participant assets, and helping secure financial futures for more than 2.6 million participants in the governmental 457, corporate 401(k) and not-for-profit 403(b) markets. Nationwide is committed to serving the retirement industry by doing the right thing at the right time through better participant experiences, administrative simplicity and values that translate to service.
Edelman Data and Intelligence (DxI) conducted the online survey on behalf of Nationwide July 19-August 4, 2021. Respondents included:
- 500 company plan sponsor, including business executives, business owners, human resources professionals, and financial management professionals who are full-time workers at U.S. businesses with at least 10 full-time employees. They must also be decision-makers for company retirement plans including 401(k), 403(b), or 457(b) plans.
- 300 financial advisors or consultants who advise at least one plan sponsor on investment decisions, financial planning, and options.
- 1,000 plan participants 45+ years of age who work full-time and have access to a 401(k), 403(b), or 457(b) plan through their employer.
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Nationwide, a Fortune 100 company based in Columbus, Ohio, is one of the largest and strongest diversified insurance and financial services organizations in the United States. Nationwide is rated A+ by both A.M. Best and Standard & Poor’s. An industry leader in driving customer-focused innovation, Nationwide provides a full range of insurance and financial services products including auto, business, homeowners, farm and life insurance; public and private sector retirement plans, annuities and mutual funds; excess & surplus, specialty and surety; pet, motorcycle and boat insurance. For more information, visit www.nationwide.com. Follow us on Facebook and Twitter.