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An increasing number of employees are choosing to delay retirement and remain in the workforce. According to the 2022 Nationwide In-Plan Lifetime Income Survey, the rising cost of living is causing approximately 40% of Gen X and baby boomer workers to delay retirement. That’s twice the number of workers that put off retiring due to the COVID-19 pandemic.

Retention of experienced workers can seem like a good thing for organizations, but delayed retirement causes issues on many levels. 

The Effects of Delayed Retirement on Employers

Delayed retirement is a significant problem for employers. There is the benefit of more time with experienced employees, but having those employees past their targeted retirement age can cause problems.

A Stagnated Talent Pool

In the previously mentioned survey, 34% to 36% of private sector companies reported putting off hiring or promoting due to delayed retirements. Those delays affect company operations on multiple levels.

For example, when companies can’t promote because senior-level employees don’t retire, junior employees notice the lack of opportunity. In a recent survey by Paychex, 63% of employees said the possibility of advancement made them more likely to stay with an organization. New jobs or promotions were the most desired career development options.

Lost Productivity

Among employer respondents to the In-Plan Lifetime Income Survey, more than a quarter noticed lower productivity due to delayed retirement. Some might attribute this lost productivity to delayed retirees’ advanced age. However, according to the Center for Retirement Research, older workers have the potential to be more productive than their younger counterparts. 

Unfortunately, when employees stay in the workforce longer than desired, they risk losing motivation and becoming disengaged. Therefore, employers must find ways of using their older employees’ skills and helping them retire when ready.

Poor Morale

Lifetime Income Survey respondents also noted a 30% drop in team morale when employees delay retirement longer than they want to. Disengagement is infectious, and a lack of motivation in one group can easily affect another. 

Also, employees notice when promotions are available less often. They may support their colleagues’ need to be in the workplace, but at the same time, they wonder when they will be able to advance. They may feel less inclined to “go the extra mile” if they think advancement isn’t possible.

Rising Talent Costs

Older workers’ experience and knowledge come at a premium for employers. According to NASDAQ, the average salary for workers aged 45 to 54 is $1,224 per week, compared to $1,003 per week for 25- to 34-year-olds and $706 per week for 20- to 24-year-olds. While older workers’ expertise is valuable, paying higher salaries to more employees ultimately cuts into an employer’s bottom line.

Research by the Social Security Administration showed that higher percentages of older workers may translate to higher benefit costs for employers, given that the need for medical care generally increases with age. Supporting employees’ efforts to retire directly impacts this aspect of the bottom line.

Factors Contributing to Delayed Retirement

When employers support team members’ retirement goals, everyone benefits. However, for HR departments to offer this kind of support, they need to understand what holds people back from leaving the workforce.

The most common answer by far is financial uncertainty. In a 2022 survey asking employees why they expect to delay retirement, insufficient savings was the most common answer. Nearly three-quarters of survey respondents (73%) worry that they won’t have enough income if they retire when planned. 

Other common reasons for delaying retirement include:

  • Depleted savings due to recent market changes (47%)
  • Concerns about a future market crash (44%)
  • Insufficient funds to live “the life that I want” (43%)
  • Reduced savings due to inflation (42%)
  • Significant withdrawals from savings due to inflation (21%)

Ultimately, all of these answers show concern about the rising costs of living. Employees are working longer because they’re afraid they won’t be able to pay the bills. 

Human resources (HR) professionals can’t fix inflation, but they can help employees understand and use retirement benefits.

How To Support Employee Retirement Goals

Among employee respondents to the Lifetime Income Survey, only 58% felt good about their retirement finances. A year earlier, that number was 72%. As close to half of an aging workforce delays retirement, employers need to focus more attention on how they can help. 

Some factors will always be outside of employers’ control. Rising prices have hit hard, and although some experts predict inflation will slow in the coming months and years, the trend may not be enough to ease employees’ concerns.

Employers must familiarize themselves with those concerns and offer programs and benefits to address them. Here are the two most important steps to take.

Financial Education Programs for Employees

In a recent Franklin Templeton survey, 81% of employees reported an interest in becoming financially independent. Unfortunately, 66% are feeling the strain of the current financial crisis, and the percentage of those feeling “highly stressed” about their financial wellness is up 7% year-over-year.

Employers can help by offering relevant financial education programs. Research shows these programs effectively assist employees in achieving their goals and preparing for retirement. Among respondents in one report:

  • 41% increased their savings thanks to employer-sponsored financial education
  • 34% understand their employee benefits better
  • 66% feel more positive about their finances

Employers should offer financial education programs in ways that resonate with their teams, such as:

  • Budgeting workshops and digital tools
  • Lunchtime seminars on financial literacy topics
  • Q-and-A sessions with experts
  • Links to financial resources
  • Regular workplace benefits orientations

HR teams must allow for different levels of financial knowledge. For example, employees of similar ages may have vastly different understandings of processes like investing, budgeting, and saving for retirement.

One particularly high-value option is offering personalized financial planning as a benefit. Employees could easily pay $150 to more than $400 out of pocket for this kind of service, so receiving it through work would be a high-value benefit.

Employers can work with a planner to offer services directly to employees or reimburse employees for receiving the service independently. Some benefits providers, including Resourcing Edge, even offer one-on-one enrollment advice and financial education to employers and their teams.

Individualized and Optimized Retirement Plans

Personalized benefits are as significant as personalized financial education. For example, among Franklin Templeton survey respondents, 77% predicted they would invest more or participate more actively in a more personalized 401(k) investment option. Nearly as many said such an option would make them more likely to stay with an employer.

Personalization starts with control. Individualized dashboards such as Resourcing Edge’s re360 let employees review available benefits, choose plans, and design customized options. Employees with 401(k) plans can use this kind of dashboard to change their plan contributions and actively manage investments.

Many employees don’t have detailed investment experience, so it’s essential to dovetail these benefits with financial education programs. The most practical option is access to a professional who understands the plans and benefits themselves.

Organizations that work with Resourcing Edge get a dedicated Financial Educator for each plan. These licensed Financial Advisors can help plan enrollees choose the options that meet their goals.

Rewarded Plan Contributions

Even the best retirement plan only pays off when employees contribute. The employer match is a time-tested way of encouraging contributions, and organizations should make the most of it. 

Employers typically match a certain percentage of an employee’s contribution up to a percentage of the employee’s salary. There are two ways to up an employer match:

  • Match a higher percentage of the employee’s contribution. For example, if a company matches 50% of an employee’s 401(k) contribution, it could up that match to 60%.
  • Match more of an employee’s salary. For example, an employer may match 50% of a contribution up to 5% of the employee’s salary. If the employee earns $100,000 a year and contributes $5,000, the employer would contribute $2,500. If the employer decides to match at the same level up to 6% and the employee contributes $6,000, the employer match would be $3,000.

Higher matches encourage employees to contribute more, but they’re not the only available strategy. If employers can’t afford to contribute more, they can incentivize contributions in other ways. Bonuses for reaching certain savings milestones are just one option.

Benefits of Supporting Employee Retirement Goals

When employers help their people to afford retirement, the benefits go far beyond healthy turnover. Employees at all levels feel less stressed about their finances, so they’re less distracted and more productive at work. They can focus more on their work and less on their personal financial concerns, so productivity gets a boost.

Meanwhile, older employees have a better chance of staying on track to retire. This supports a healthier turnover rate at higher levels, as younger employees step into senior positions and companies can take on fresh talent.

Higher-level turnover allows for more internal advancement and external hiring. Employers can attract more competitive candidates by offering financial assistance and customized retirement plans in their benefits packages. Over time, the entire team becomes more robust.

Assisting employees with their retirement goals is one of many ways organizations can use benefits to their advantage. Resourcing Edge is committed to helping businesses simplify benefits administration and other aspects of human resources, so leaders can focus more on running their businesses.

Request a free quote today, and see how Resourcing Edge can help you build a healthy, productive workforce.



  1. PLANSPONSOR: “Workers Delaying Retirement Has Doubled Since Last Year.”
  2. Paychex: “Looking for the Secret to Employee Retention? Try Offering More Career Advancement Opportunities.
  3. Center for Retirement Research: “The Impact of Population Aging and Delayed Retirement on Workforce Productivity.
  4. Nasdaq: “The Average Salary by Age in the U.S. – Are You Making What You Should Be?
  5. Social Security Administration: “Variation of Employee Benefit Costs by Age.
  6. Nationwide: “Nationwide In Plan Sponsor Survey Report.”
  7. Kiplinger: “Kiplinger’s Inflation Outlook: Rising Prices To Ease Soon.
  8. nudge: “Why financial education breaks organizational barriers and helps individuals thrive.
  9. Sustain Financial Inc.: “How to Offer Financial Planning as a Workplace Benefit
  10. Business News Daily: “How Does 401(k) Matching Work for Employers?


Jami Beckwith

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