Helping employees navigate financial and lifestyle changes in retirement 

Retirement is a key milestone in every employee’s career. It’s the natural progression for employees to advance and eventually make way for the next generation to begin their professional journey. Yet, as employees approach this stage, many find themselves clouded by uncertainty. Often, this hesitation isn't driven by a reluctance to retire, but rather by the pressing concern of affordability. For many, it’s not a question of desire, but one of financial security, and whether they’re truly prepared for life after work.

While working with a financial adviser can be valuable for employees at this stage, the cost and accessibility mean it is only available for a small portion of the workforce. That’s likely why, according to Mercer’s "What’s the Price of Freedom?" report, 30% of individuals who accessed a DC pension had not received advice and 50% of all pension plans were accessed without any guidance in 2019/20.¹

A more inclusive solution, and one that can empower the entire workforce to feel prepared for retirement, is employer-funded financial education. 

Pre-retirement courses can offer a detailed breakdown of the financial requirements for individual workers, considering factors like lifestyle expectations, healthcare costs and inflation. By providing a realistic view of retirement expenses, employees are better equipped to assess whether their current savings align with their future needs.

However, retirement brings more than just financial changes — it also brings a shift in lifestyle. Many employees have expressed that they feel unprepared for the lifestyle adjustments that come with retiring. Therefore, pre-retirement workshops should not only address financial readiness but also help employees navigate this important transition in their way of life.

These workshops help employees manage expectations around shifts in daily routines, social interactions and maintaining a sense of purpose. They encourage planning for mental and emotional well-being as well as physical health. 

Health concerns, in particular, often grow as retirement approaches, especially when employees face losing workplace benefits like private medical insurance. At a time when access to healthcare may become more important, this loss can cause real anxiety.

Solutions that extend private medical cover into retirement can help ease these worries, so that even after leaving the workplace, employees can stay protected with the right insurance in place.

By considering both financial and lifestyle factors, these solutions empower employees to transition smoothly into retirement, leading to a more balanced and rewarding post-work life.

Ensuring employees are both financially and emotionally prepared for retirement benefits not only the individuals but also the organisation as a whole. When employees retire at the right time, it provides employers with the opportunity to implement effective succession planning, allowing for a seamless transition as new hires or internal promotions take on key roles without disruption.

Financial stress is also known as one of the leading causes of anxiety, and if employees feel confident in their financial readiness when approaching retirement, they are more likely to be satisfied with their decision. This sense of security can reduce the risk of burnout or disengagement in their final years. This not only helps maintain a positive and productive work environment but also prevents the potential drawbacks of employees staying on beyond their optimal working period.

^Footnote

1) What’s the price of freedom?