One in Four Employees Over 45 Plan to Delay or Give Up on Retirement

One in Four Employees Over 45 Plan to Delay or Give Up on Retirement

Employees say the pandemic has forced them to change their plans
middle aged man at work

As employees struggle to recover from the COVID-19 pandemic, reports have drawn much attention to the "Great Resignation." Between increased financial pressure on younger workers and mass turnover, employers have struggled to attract and retain workers in the 30-to-45 year age range. However, financial shifts caused by the pandemic are impacting older workers, too.

A recent survey, conducted by insurance and financial services organization Nationwide, focuses on retirement plan participants ages 45 and older. In the Nationwide Retirement Institute® survey, respondents reveal a growing trend toward delaying retirement, and a resulting negative impact on their mental health.

Market volatility amongst main concerns for older employees

The Nationwide survey shines a light on how the pandemic has shifted retirement plans and raised new concerns for employees at and over the age of 45. Here's what respondents say:

  • About 25% of participants 45 and over — and 30% of participants 65 and over — say the pandemic has caused them to push back retirement, or will prevent them from ever retiring
  • 51% are worried about market volatility; 48% report fear of outliving their income

Recent studies reveal that a wide variety of retirement-related concerns are weighing on older individuals, including concerns about inflation, health care costs, the financial strength of Social Security and the possibility of facing another recession.

Delayed retirement takes a toll on mental health

The anticipation of delayed retirement has a direct, negative impact on employees. In fact, 48% of those surveyed say that delayed retirement has negatively impacted their mental health, while 39% say it impacts their morale and 23% their productivity. Nearly half of all respondents report feeling frustrated (48%) about their retirement plans, while another 42% say they worry about the future.

In general, many employers aren't aware of how severe mental and emotional burnout has become for workers. According to the Nationwide study, the majority of companies aren't aware of the issues facing their employees ages 45 and over.

Nationwide's study does provide recommendations for how companies and plan sponsors can help employees transition out of the workforce. Recommendations include offering guaranteed lifetime income investment options, as well as financial planning that helps employees prepare for "the retirement they want, when they want it."

Methodology: On Nationwide’s behalf, Edelman Data and Intelligence (DxI) conducted this online survey from July 19 to Aug. 4, 2021. Respondents included 500 company plan sponsors, 300 financial advisors and 1,000 plan participants 45 years of age or older; these plan participants are full-time workers with access to a 401(k), 403(b) or 457(b) plan through their employer.