Australia’s population is ageing and with this, it is globally recognised that many employees are working well beyond their suggested retirement age. Past statistics from the Australian Institute of Health and Welfare show that the participation rate of Australian’s aged over 65 in the workforce has almost doubled since 2006 and is expected to continue rising.
There are various motives surrounding employees drives to work past their retirement age. Many find that with the life expectancy age increasing, they are feeling healthier than ever and more capable to continue their current work roles. However, a large majority of individuals in the workforce feel they have no choice than to put off retirement due to their inability to support themselves and their families during and subsequent to the transition.
Alarming statistics from the 2018 Global Retirement Reality Report indicate that while the majority of individuals understand that retirement planning is their responsibility, only one in five Australians in the workforce are comfortable about their financial retirement situation. 43% of Australians then indicated that they plan to retire later in life to ensure that they are financially ready for any level of retirement. More so than ever before, employees are seeking any advice possible to assist with their impending retirement and financial worries.
The Association of Superannuation Funds Australia has estimated that individuals will need approximately $545,000, and couples a combined saving of $640,000 for a comfortable retirement. Statistics reflect that the average male aged 55-59 will have $237,022 and the average female aged 55-59 has around $123,642 in retirement savings.
As an employer, there are many steps you can take to ensure that your employees are prepared for retirement, and if they aren’t, how you can help them work towards a healthier looking future. Dr Sarah Cotton from Transitioning Well explains “As people get towards retirement age, you need to help them proactively manage that phase. Whether that’s complete retirement of the right to request flexibility."
Early support
It is important to start discussing retirement before it is too late for the employee. Providing education and resources to both younger and older employees on the importance of retirement saving is the first step to playing a positive role in your employee’s retirement.
Understand your employer obligations
Employees may approach you with requests to help assist their retirement transition and it is important to gain an understand of your basic obligations. Dr Sarah Cotton states “Employees who are over 55 have the right to request flexible work arrangements” making it imperative that as an employer you understand that any assistance is aligned to the best practice concerning the company’s policies and any legal policies.
Mentoring programs
The younger generation of employees may not view retirement has a central finance issue right now, however it is important to transfer the significance of early planning. Dr Cotton states “Perhaps set up some mentoring programs to help people in their phased retirement, so they move into more of a mentoring role.” Seeing the retirement process first hand may encourage younger employees to act now before it’s deemed too late.
Show empathy
Retirement planning and transitions can cause high levels of stress for employees. As an employer it is crucial to understand the emotional affects that the transition may have on your workforce individuals. “A lot of interventions focus on the financial and physical implications of retirement. What’s often forgotten is the emotional element, and the massive change people have to go through to get to that new normal” states Dr Cotton.
At any age, superannuation can be confusing. Providing adequate and effective support to your employees can greatly influence positive financial wellness within your company. Make it your goal to engage and educate your employees so that they can regain control of their retirement planning and future.
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