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The Average Retirement Savings by Age

If you’re like the majority of people, you probably need to step up your retirement-saving efforts. A recent report from the Government Accountability Office (GAO) found that the median retirement savings for Americans between age 55 and 64 was $107,000. The GAO notes this sum would only translate into a $310 monthly payment if it was invested in an inflation-protected annuity.

Household savings in all retirement accounts have dramatically increased since their pre-recession levels, including among millennials ($9,000 in 2007 to $36,000 in 2017), Generation X ($32,000 to $71,000), and baby boomers ($75,000 to $157,000), according to a Sept. 2018 report from the Transamerica Center for Retirement Studies.

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Older Workers Unable to Retire Cost Employers $50,000 a Year

Because many employers are unaware of the cost of having older workers unable to retire, or think they cannot calculate it, Prudential Financial has done the analysis and published its findings in the report, “Why Employers Should Care About the Cost of Delayed Retirements.”

For each individual who cannot retire, the cost averages an extra $50,000 a year, representing the difference between the salary of an older worker and hiring a younger person, according to Prudential. The annual cost across a workforce is an additional 1.0% to 1.5% a year.

For example, consider a company with 3,000 employees and workforce costs of $200 million. A one-year delay in the average retirement age would cost the firm between $2 million and $3 million. A two-year delay would average an additional 2.2% in workforce costs, and a three-year delay, 3%. In addition, health care costs for a 65-year-old are twice that of a worker between the ages of 45 and 54, Prudential says.

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Employers are scaling back their dependence on high-deductible health plans

Everything old is new again. As open enrollment gets underway for next year’s job-based health insurance coverage, some employees are seeing traditional plans offered alongside or instead of the plans with sky-high deductibles that may have been their only choice in the past.

Some employers say that, in a tight labor market, offering a more generous plan with a deductible that’s less than four figures can be an attractive recruitment tool. Plus, a more traditional plan may appeal to workers who want more predictable out-of-pocket costs, even if the premium is a bit higher.

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