The New Retirement
There was a time when people could expect to retire at 65 and feel that their employer’s pension or retirement package would be enough to make retirement comfortable. There was a time when retirees would move to warm climates and golf daily. That was then, now retirement has become something new. Today retirees are suing their employers over pension cutbacks. And many individuals who are approaching retirement are deciding to delay their plans according to a recent King5.com news story.
A recent poll showed that nearly half of those approaching retirement age, currently age 67 for those born after 1959, are choosing to delay retirement or go into a quasi-retirement. There are many factors that have led to this shift. The recession, market plunges, and drops in home values are some of the key reasons, but they are not the only reasons. The story includes other reasons like people starting families later in life and having to support underage children. Some individuals who have retired have either had to return to work for immediate financial reasons or have decided to return to work for health insurance needs. But it is not all bad news for the baby boomers, as a recent story in the Seattle Times notes, the longer one waits for retirement the lower the risk of dementia. It is also important to note that the poll found that the majority of the respondents were happy with their current employment. And in many cases the respondents felt well enough and enjoyed their work to the point where they were content to work past retirement age. So a more active and potentially employed retirement period can have its benefits.
ERISA (Employee Retirement Income Security Act) is a federal law that requires employers to inform employees how their retirement withholdings are being invested. The law covers other employee benefits, but was initially created as a result of employers defaulting on employee pension plans because there was no transparency in their investments. Employees with employer provided retirement plans should receive regular notices on the status of their retirement investments.
Employment Based Retirement Planning Options
There are a number of employer offered options for retirement planning and savings. Not all employers will offer all of the various options but most employers will have some plan available to their full time employees. Generally part time employees will have to set up a retirement plan separate from their employer, like an IRA. Some of common employer offered retirement savings options are the 401K, pensions and retirement packages that include additional retirement coverage like extended health insurance benefits.
Given the current economy, it is important for everyone to consider and investigate their retirement situation. If you need assistance with your retirement related benefits, contact an experienced HKM employment attorney.