What does it cost firms when people put off retirement?
Here’s a good reason to do everything you can to help workers hit their retirement goals: Employees who put off their retirement directly impact a company’s bottom line in a negative way.
In fact, it’s estimated that employers pay an additional $10,000 to $50,000 per employee for every year a worker puts off retiring.
These added costs come mostly from healthcare spending and higher salaries that longer-tenured workers earn compared to the newer employees who would replace them.
The best way to help them hit their goals: Constant education.
In fact, there’s a direct correlation between the number of retirement education sessions offered and employees’ 401(k) contribution rates.
Example: Research by Financial Finesse found that individuals who received retirement education annually had an average 401(k) contribution rate of 5.7%.
On the other hand, individuals receiving five or more education sessions had an average contribution rate of 11%.
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