Employers Can Help Employees With Beneficial Retirement Timing

Employees who retire with strong retiree benefits are happy retirees, but those who leave because they feel disengaged regret when they retired and worry about not having enough money.

For most people, the decision to retire was prompted by both personal and professional circumstances, according to a survey of 4,049 retirees age 65 and older by Willis Towers Watson.

More than one-quarter of surveyed retirees cited employer incentives—such as eligibility for retirement and retiree health benefits—as their main motivation to retire. Among more recent retirees, however, the relative importance of employer programs has declined, while workplace environment and eligibility for Social Security and Medicare play larger roles.

Retirees who based their retirement decision on eligibility for employer benefits or other employer incentives seemed to be enjoying retirement more than retirees with other motivations, and they were less likely to regret their decision to retire.

As more people delay retirement, the work environment is assuming a larger role in retirement decisions, with workers’ feelings about their jobs becoming increasingly instrumental. More than one in five retirees (23%) cited disengagement with their job as a key reason for deciding to retire. This is signaling that changing the work environment could open up alternative ways for employers to influence employees’ retirement timing, counterbalancing the receding impact of direct employer incentives.

This is important for employers. Those who retired because of dissatisfaction with their workplace had more negative experiences: 31% felt they had retired too soon, 24% had difficulty adjusting and 23% worried about whether they could afford retirement. Towers Watson says this is likely to become more problematic in the future, as more employees continue working because they can’t afford to retire, despite feeling disappointed and less engaged with their jobs.

More findings from “Why Workers Retire When They Do: A Survey of U.S. Retirees” may be found here.