Infographic: How much do you need to save for retirement?
June 9th, 2016
Share this story
Share this story
With competition for the best talent increasingly fierce in this era of global skills shortages, could organizations that help employees focus on and prepare for both short and long-term wellbeing gain an edge?
Employers are increasingly paying attention to the rising cost of health care, and to helping their staff stay fit and productive. Gym memberships and wellness programs are popular benefits that can help attract and retain staff.
Retirement planning, meanwhile, can seem less of a priority – especially for younger workers. The current low-interest environment is causing low rates of returns, discouraging savings. What’s more, the different options for pension investments are little understood by employees – who are increasingly responsible for their own financial futures – making “education” increasingly more important.
But there is a good case for seeing retirement planning as a key part of employees’ overall wellbeing. “Health and wealth are connected in more ways than we often consider with health care costs impacting workers’ short- and long-term finances, and financial well-being affecting physical health and engagement at work,” says Cary Grace, CEO, Global Retirement & Investment, Aon Hewitt. “Employers are increasingly considering this intersection between physical and financial health and how they can help their workers’ improve their overall wellbeing.”
So how much do employees need to save to ensure a comfortable retirement – and how do they want their employers to help them with navigating the complexities of long-term financial planning?
“We have witnessed a dramatic global shift… towards private retirement saving plans, in which benefits depend on the value of accumulated assets… This has transferred significant risks from the state and employers to individuals… accompanied by a trend towards lower overall contribution rates. Together these developments raise very significant concerns about the adequacy and security of future retirement income at a time when longevity is increasing and when the global experience of low returns and high volatility, following the 2008 financial crisis, have reduced public confidence in retirement savings.” – Organization for Economic Co-operation and Development / Cass Business School
“The current average level of savings is not sufficient for most employees to expect to be able to retire by the traditionally-targeted age of 65. Additional savings or a revised retirement age expectation is needed. Employers are in a position to help employees set realistic expectations.” – Grace Lattyak, Associate Partner, Aon Hewitt
“Workers face a variety of challenges when it comes to saving for retirement, from budgeting for every-day life events to managing debt to setting aside money for unexpected emergencies. Fortunately, employers are providing more tools and resources to address these needs and truly make an impact on worker’s long- and short-term savings goals.” – Rob Austin, Director of Retirement Research, Aon Hewitt