Retirement benefit plans can help American workers improve their financial wellness. According to a recent study from Bank of America Merrill Lynch, employers need to do more to prepare workers for retirement. Higher health care costs have caused many employees to be able to save less for retirement, and 25 percent of workers who are within five years of retirement will have less than $250,000 saved.
"We see many employers actively working to empower employees to take greater control of their financial success, as well as enhancing their financial benefits to ensure they are results-based, easy to use and encourage healthy behaviors," said Kevin Crain, head of institutional retirement and benefit services at Bank of America Merrill Lynch. He added companies, retirement planning services and legislators needed to continue working together to improve retirement wellness.
Most employees surveyed reported being willing to forego a portion of their current salary to ensure a steady income during retirement. Some employers are making a greater effort to prepare their workers for retirement, but the study indicated more improvements are needed, especially when it comes to saving for the rising costs of health care. Firms that are unsure of how to offer plans to employees can consult retirement planning services to help workers prepare financially.
The study revealed 85 percent of individuals did not feel they were saving enough, and 60 percent thought it would be very difficult to maintain their current standard of living during retirement. The majority of employees thought their company benefit plans will be their largest source of income during retirement compared to Social Security. Workers reported wanting financial advice on how to plan and save for retirement. With the growing importance of financial preparation, employers could benefit from retirement planning services.