For many employees, the dream of a secure, comfortable retirement feels increasingly out of reach. Rising living costs, persistent inflation, and the decline of employer-sponsored pensions have reshaped retirement into a personal responsibility -- and a growing financial stressor.
The data tells a sobering story:
Meanwhile, millions (especially baby boomers) are delaying retirement or returning to the workforce to stay afloat. These trends do not just impact individuals. They carry real consequences for workforce planning, healthcare costs, talent mobility, and overall productivity.
The good news? HR and benefits leaders have an opportunity to change the trajectory.
The retirement readiness gap refers to the disconnect between how prepared employees think they are to retire and their actual financial capacity to do so.
Even employees who contribute to a retirement plan may be unprepared due to:
The retirement readiness gap is not just an employee problem; it is a bottom-line business challenge that is costing organizations tens of thousands per employee while creating significant operational risks.
When employees cannot afford to retire, the impact to business is immediate and costly:
Financially stressed employees are also more likely to be distracted at work, disengaged, or actively seeking new employment, creating additional costs in turnover and lost productivity.
A modern financial wellness program goes far beyond 401(k) education. It's a proactive, personalized support system that helps employees model retirement scenarios, optimize savings, and make smarter decisions with confidence.
Best-in-class programs offer:
This kind of holistic support helps employees take action and helps companies maximize ROI from existing benefit investments.
Just because you offer retirement benefits does not mean employees understand how to use them effectively. Many are confused by contribution limits, unsure about investment options, or unaware of employer match opportunities.
Help employees get more from what is already available:
Big life changes (marriage, having children, turning 50) are moments when employees are more open to financial guidance. These events are perfect opportunities to reinforce long-term financial planning.
Employers can support workers during financial milestones by offering targeted support:
Retirement readiness gaps disproportionately affect women (who save less than men, with 57% of women saving less than 10% of their income vs. 39% of men), workers of color, and lower-income employees, creating potential retention and DEI challenges.
As part of your DEI strategy:
Employees in their 30s and 40s may not feel retirement is urgent, but this is exactly when small decisions have the biggest long-term impact.
Introduce resources such as:
Helping employees course-correct earlier makes retirement more achievable and reduces stress later.
Retirement support should be modeled and prioritized at the leadership level. When executives treat financial wellness as a strategic investment, it signals long-term commitment to employees.
This means:
The retirement readiness gap is more than a personal financial concern; it is a business challenge with real operational costs. Delayed retirements, disengaged employees, and missed planning opportunities all contribute to workforce inefficiencies that companies can no longer afford to ignore.
By taking a proactive, inclusive approach to retirement planning through education, tools, and personalized support, HR leaders can reduce financial stress, boost engagement, and improve long-term organizational outcomes.
The question is not whether you can afford to support employee retirement readiness. It is whether you can afford not to.