One way to improve retirement readiness even more is to combine an increased savings rate with extra years of working before retiring, CRR research found. Combining two extra years of work with a five percentage point boost in contribution rates cuts the NRRI by more than half, to 23%. While not an option for everyone, working longer has a triple benefit: it delays the receipt of Social Security benefits by a few years, enables the individual to accumulate savings for more years, and it means having to fund fewer years of retirement.
As employers continue to shift from offering traditional pension plans to 401(k) plans, the burden of saving for retirement has fallen more squarely on working Americans. Employers can help employees improve their retirement readiness and their overall financial well-being by offering financial wellness programs. By providing education, tools, and advice focused on foundational financial issues, these programs can help employees make smart decisions around reducing debt, saving more, and closing gaps in their financial plans.
See some of the concrete successes achieved by an 8,000 employee health system in Central Pennsylvania when, as part of its financial wellness program, it made a Prudential Retirement Counselor available to its employees.