Thanks to the employee benefits that business owners provide, millions of Americans today are able to afford their medical expenses. Nearly three-quarters of consumers get their health insurance through their employer, according to statistics from the U.S. Census Bureau. And since the implementation of the Affordable Care Act – which requires many companies to provide health care to their full-time workers – companies are now more intimately involved in their workers' coverage decisions than ever before.
Everyone appreciates the comfort of knowing that they have the financial resources they need to take care of their health and well-being, both for themselves and their family. But the same kind of assuredness isn't found with something else that most everyone hopes for: retirement. Employers may be able to help, though.
Few Americans are confident that they'll be able to leave their jobs for good once they get into their 60s and 70s. According to a recent survey conducted by Andrews Research Associates on behalf of consulting firm Deloitte, less than half of working-age adults – 45 percent – feel "very secure" that they'll have the amount of money they need to retire comfortably.
Some of this stems from the belief systems that some people have about what's important to them in the here and now. For example, in a survey done by multinational banking firm HSBC Holdings, nearly 25 percent of respondents considered it better to spend all their savings now, while they can enjoy it, rather than saving it for when they get older, not knowing what their health will be like at that point.
1 in 5 say they'll work until they drop
Others, meanwhile, have "given up the ghost," as the saying goes, and decided that they will work for the rest of their lives, knowing that they'll never be able to adequately fund their post-career years. Approximately 20 percent of workers say they intend to stay in their present job up to or until their health no longer allows them to, according to a poll conducted by the Transamerica Center for Retirement Studies.
Ultimately, retirement realizations are up to the person and the financial decisions they make. Circumstance vary, of course, making some people needing to work despite years spent saving. But employers can increase their workers' odds through their retirement program offerings.
According to study conducted by Wells Fargo, when employers offer a systematic retirement savings plan, like a 401(k) not only do many workers participate, but they're often successful with their savings goals. The study found that of the 93 percent of employees participating, close to 66 percent were taking enough earnings from their income to make the most of their company's matching contributions. The typical amount that workers put toward their retirement was 7 percent of their annual wage.
Employer-controlled deductions help workers save
Automatic deductions can help people reach their retirement goals. The Wells Fargo study found that these employer-implemented deductions made a "significant difference" in retirement saving, noted John Terry, president of investment advisory firm High Street Asset Management.
"The ability to 'pay yourself first' and put a retirement contribution plan on 'auto-pilot' were seen as just as important to this demographic as having enough money to pay their bills," explained Terry, according Agent eNews. "But without the discipline that systematic deduction brings to the table, the vast majority of middle Americans lack the willingness to set aside today's dollars for tomorrow's needs."
Terry also pointed out from the survey that nearly 60 percent of respondents said they believed it was next to impossible to pay the bills and also save for retirement without a 401(k).
More than one-third of full-time workers say Social Security will be a major source of income for them in retirement, based on a survey done by Gallup. However, for every three people that contribute to Social Security, one person collects, a ratio that may be unsustainable, thus rendering the entitlement program insolvent.
By offering a retirement savings vehicle, businesses can provide their workers with the tools they need to live out their golden years happily.
