Need for Healthcare Delays Retirement for Many
Employees hoping to bail out of the workforce and retire are going to wait longer to pull the rip cord, a new survey found. And many of them say they’re willing to pay more to pack the chute.
Four out of ten U.S. workers are planning to delay their retirement , according to a new survey by consultants Towers Watson. And a vast majority of them are prepared to pay more now for greater certainty in their future retirement and health benefits.
Older workers and those in poor health are the most likely to delay retirement. Nearly half of workers in poor health said they planned to postpone retirement. Health care was also top of mind with older workers. Two thirds of them said that the reason they were deferring retirement longer was to keep their health care coverage .
“The economic crisis has had a deep effect on employees’ attitudes toward retirement and especially on risk,” said David Speier, a retirement consultant at Towers Watson. “Despite the signs that some employees are saving more, spending less and reducing debt as the economy stabilizes, workers continue to fear that they won’t be able to afford retirement — and that will have significant implications on companies’ ability to plan their future workforce needs.”
It appears that older workers are coping with their current situation by delaying retirement, reducing their expectations and possibly settling for a lower standard of living in retirement, said Kevin Wagner, another Towers Watson consultant.
“Unfortunately, the groups of employees that feel most compelled to take these steps are often those that can least afford to — older workers and those in poor health,” he said. “Today’s challenges of retirement and health care affordability are creating a new set of ‘hidden pensioners,’ a group that otherwise is ready to retire but cannot afford to do so.”
The survey also found that a majority of workers (56 percent) would be willing to pay a higher amount from their pay check to ensure a guaranteed retirement benefit, up from 46 percent in February 2009. And more than half (54 percent) would be willing to pay more to ensure access to health care benefits if they retire before they are eligible for Medicare.
“Interestingly, not just older employees are wary,” said Speier. “Younger workers, who are generally less risk-averse given their retirement timeline, are also willing to forgo pay and benefits today for guaranteed and predictable benefits when they retire.”
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