A recent study conducted by the Employee Benefit Research Institute (EBRI), 6 out of 10 baby boomers feel unprepared for retirement.

With so many boomers leaving the workforce, there’s an obvious opportunity for companies to structure and communicate retirement programs to help their team with this transition.

One of the most distracting personal issues that negatively affects an employee’s productivity is financial stress. As an employer, it’s in both your and your employee’s best interests if they aren’t overwhelmed by retirement.

Fortunately, more and more employers are taking note of this and offering ‘retirement readiness’ initiatives.

Recently, Illinois was the first state to even enact legislation that requires all employers to adopt a retirement savings arrangement for employees.

As an employer, how can you best prepare employees for retirement?

First of all, it’s not all about financial security.

When it comes to retirement, it’s important to consider the psychological change as well.

Particularly those who hold senior positions, or have late nights in the office – work can really define them. When someone’s identity is tied to their career, it can be a huge loss when they retire. Employers can help with the psychological transition by having employees sit down with their HR department, who can help them begin to consider what their day-to-day might be like in retirement.

Other options for employers can include offering seminars that discuss the non-financial aspects of retirement planning. Kate Dack, a coach at Retirement Coaching Canada explains that these seminars can cover areas like “relationships in retirement, building a vision and an action plan, and potential relocation options”.

When it comes to financial aspects of retirement, employers can assist with planning, budgeting, and proper asset allocation.

Unfortunately, when the recession hit in 2008, contributing to a 401(k) became a lower priority for people wanting short term financial relief.

At the same time, knowing when you are financially prepared for retirement is not as clear as it was in the past. Traditionally defined pension plans meant people knew exactly how much retirement income they would have well before their decision to enter retirement. As a result, this shift means that employers who offer only a 401(k) plan may need to be more hands-on in their effort to ensure employees retire comfortably.

At the most basic level, education is key for employees to truly understand the importance of saving for retirement – and employers can provide this education.

For example – many employees make the mistake of assuming that the benefits they get through Social Security will be adequate in retirement. Today, there are several online tools available on the U.S. Social Security website where employees can use retirement estimators that are based on their Social Security earnings record – Share these with your employees!

In addition to providing basic tools to get employees thinking about retirement needs, employers should use a fully automated savings program that enrolls employees, sets a retirement target, and has a strategy for contributions.

Because employees may not have the knowledge, time, or motivation to plan and execute their own retirement savings plan, automated savings programs can ensure that no one veers too far off the path to security.

As well, it’s important to remember that there won’t be a cookie cutter approach that will be perfect for everyone – customize your communications! For employees over the age of 50, you may want to focus on informing them about catch-up contributions they can make, whereas younger employees would benefit more from information about maximizing matching contributions.

Want to learn more about how you can help your team prepare for retirement? Get in touch with one of our HR experts!