Older workers postponing retirement in wake of pandemic

As a result, they have become less happy and more frustrated at work.
One in every four workers with retirement plans sponsored by their employers who are over 45 say that they have pushed back their retirement plans as a result of the pandemic, according to a survey by Nationwide, a provider of insurance and financial services based in Columbus, Ohio.
The online survey polled 1,800 respondents, including full-time employees at U.S. businesses with at least 10 full-time workers, financial advisers, executives and business owners. Most are participants in 401(k), 403(b) or 457(b) retirement plans.

Over 65s most affected

The Great Delay is even more noticeable among those workers who are older than 65, the survey found. A third of these workers say they intend to delay their retirement plans for at least three years later than they had thought they would before COVID-19 upended their world.
A major problem that these employees face is that they are unsure how much money their retirement savings will yield in terms of income on which they can live for the rest of their lives.

Half say they are concerned about volatility in the stock market. They also are worried about how they will be able to manage their expenses and their lifestyle in retirement. With interest rates near zero, another concern is that they will outlive their income in retirement.

Employers should pay attention

Executives at many companies, unaware of The Great Delay, are focusing on The Great Resignation—the name given to a trend among a record number of workers to quit their jobs out of dissatisfaction with their present working conditions. More than 4 million American workers have been leaving their jobs every month, according to the U.S. Bureau of Labor Statistics.

A review of employee records from 4,000 companies that was recently published in Harvard Business Review found that employees aged from 30 to 45 had the highest increase in rates of resignation. The rate among them was greater than that for those workers aged 20 to 25, among whom resignations actually fell.

As a result, employers have been placing a lot of effort and emphasis on retaining and attracting talent among the 30-to-45 age group.
There is another side to the story, however. Older workers are another group in the employee base that needs attention, says Amelia Dunlap, vice president of marketing at Nationwide Retirement Solutions.
The reason is that their fears about retirement are not only delaying their decision to retire, but also are affecting their working life.

Frustrated and worried

Dunlap points to results in the survey that found:
• Almost half of those older workers who took part in the survey said they feel frustrated, saying that the postponement of their retirement plans has had a negative effect on their mental health;
• Four out of 10 are worried or sad, which has lowered their morale at work;
• About a fourth of respondents say their productivity has been affected; and
• Almost two in every 10 older workers feel hopeless.

Can harm a company

These negative feelings, in turn, can harm a company’s profit and culture, Dunlap says.
Even more concerning is that fewer than a quarter of those financial plan sponsors who took part in the survey have recognized that this situation is taking place in their workplaces, she adds.
To counter these feelings, employers should invest in those long-term and short-term financial plans that can help workers to attain their monetary goals. In that way they can be prepared for the kind of retirement that they desire and when they desire it.
A way to help them might be to help workers retire on time by offering them investment choices that will guarantee lifetime income, Dunlap suggests. In this way they could be confident that they could generate income that they will not outlive when they are retired.
Companies should work with advisers or consultants to determine which choices and which benefits are best for the participants in their retirement plans, she adds.