08:50 AM

Plan Sponsors face more than just The Great Resignation For many older workers, it’s the Great Delay

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.

Edelman Data and Intelligence (DxI) conducted the online survey on behalf of Nationwide July 19-August 4, 2021. Respondents included 500 company plan sponsors, 300 financial advisors or consultants who advise at least one plan sponsor and 1,000 plan participants 45+ years of age or older