Older workers “must take greater action and more responsibility to prepare for their financial security and long-term health, as well as to actively understand what type of employer benefits and retirement plans are in place for them,” according to an Aegon report on retirement readiness and extended working careers.
Key steps it recommended include:
“Take time to understand your workplace retirement plan, and other non-retirement benefits and compensation packages” by understanding the features of both defined benefit and defined contribution programs and employer matching contributions in the latter type; deciding how much to invest and understanding how to change that amount if desired; and understanding health and other insurance, and programs such as flexible working hours for caregiving responsibilities and availability of training.
“Develop a written retirement strategy by writing down the expected income you will need in retirement to achieve a comfortable lifestyle” by providing for meeting daily needs, saving for the future and for emergencies; and a backup plan in case of events such as a job loss. “Share your plan with your family and those with whom you have a financially dependent relationship; this will help ensure your plans account for your family’s future financial needs and that they are aware of what to do in case of unforeseen events,” it said.
“Adopt a healthy and active lifestyle” by avoiding harmful behaviors, healthy eating, routine health checks and participation in workplace health programs.
“Take time to learn and understand the fundamentals of financial literacy: compound interest, inflation, risk diversification, budgeting, savings vs. debt, investing, taxes, risks of market volatility, and risk of outliving the savings.”
“Engage in lifelong learning by keeping job skills up-to-date and learning new skills. Maintaining and learning new skills can help prepare for changes in the workforce, and for new and longer careers.”