By William H. Shawcross, Jr.
In the past 30 years, workers have witnessed a substantial shift in the U.S. retirement system. With fewer employers offering traditional pension plans, and more of the decision-making power shifting into the hands of individuals, employees have no other choice but to take greater control of their own retirement readiness. These trends, along with longer life expectancies, mean saving and planning for retirement are critical financial decisions for Americans.
Millions of Baby Boomers will move into retirement between now and 2020. However, many have experienced financial shortfalls and are struggling to make ends meet. More than 32 million younger Baby Boomers may never be able to retire, or they will have no alternative but to postpone their retirement. Also, by 2020, it’s estimated that 35 percent of men and 28 percent of women between the ages of 65 and 74 will be in the workforce.1
Retirements and delayed retirements are both having a direct impact on employers. Employers in tight labor markets, such as utility companies and financial and accounting firms, are entering about 15 years of staffing shortages as they risk the potential loss of experienced workers. In some of those occupations, it may be beneficial for people to stay beyond normal retirement age. In other cases, the opposite may be true. Older blue-collar workers may have physically demanding jobs, which can lead to significant physical limitations. Meanwhile, some white-collar workers may find it difficult to be fully engaged in their work if they’re just there for financial reasons.
Delayed retirements may also result in tangible costs for employers. Annual health care claims average $2,888 for employees younger than 25. For workers 65 or older, however, that number jumps to $10,264.2 Further, workers’ compensation medical claims get longer and costlier as workers age. There is also an intangible cost associated with losing talented employees. If older workers don’t retire, it’s harder for businesses to promote younger workers. If Gen X and Millennial employees feel they can’t climb the ladder at their current jobs, they will seek out other organizations.
Whether your primary concern is your personal retirement or anticipating how to manage talent at your business or other organization, having a partner to consider the best options and assist in planning for the future may be to your advantage. To learn more about retirement solutions from BB&T Retirement and Institutional Services, contact your BB&T Wealth advisor.
- Stanford Center on Longevity estimates based on U.S. Bureau of Labor statistics data, July 2013
- Apex Management Group Report
About the Author
William H. Shawcross, Jr.
Senior Vice President Director of Relationship Management BB&T Retirement and Institutional Services
Bill has more than 30 years in the trust and retirement business. He serves on the RIS Senior Leadership Team with responsibilities for client retention, relationship management sales, philanthropic services, employee communications and employee benefit technical services. He earned a bachelor’s degree in political science from the University of Richmond.