Financial planning is tricky, especially as the economy fluctuates and the average retirement age continues to change. As more employees are keeping up with the 9-to-5 grind later than they had originally thought, it can be beneficial when their companies have strong retirement planning services available through an HR software solution.
Every business is different, which is why workforce management consulting can help managers find the most applicable program for their daily operations. From there, employees will be able to create a strong retirement plan and are likely to be more satisfied at work.
The Society of Actuaries conducted a survey that found just 16 percent of retirees stopped working after age 65, which is far less than the 55 percent who had expected to retire at that time. Additionally, the Employee Benefit Research Institute (EBRI) found that 69 percent of workers expect to have a job that supplies an income after retirement, but only 25 percent of current retirees actually do.
According to Karen Wimbish, director of retail retirement at Wells Fargo, the old rules of thumb when it came to saving money in stocks and bonds are no longer applicable.
“Today if you go that conservative, you won’t be able to keep up with inflation,” she told CNBC. “The old formula was based on your parents, who lived 10 years in retirement. People today will live a lot longer. They need to keep growth in their portfolio. The mix should be 50-50 (50 percent in stocks, 50 percent in bonds) instead of 80/20.”
Wimbish added that individuals are often unaware of how much money it really takes to fund their lifestyles, which is why strong retirement planning is necessary for a smooth transition into life after work.