Many (if not most) full-time
employees in private industry have access to some type of retirement
benefits. Part-time workers' access is usually more limited. However, the decline in defined benefit pension plans and the replacement
by defined contribution plans makes preretirement planning more important
than ever. While all financial planners advise individuals to invest
more and more conservatively as they near retirement, this message
often does not get through. Many workers have had to put off retirement
as they saw their investments tumble with the stock market, even as
they were one or two years away from their planned retirement.
As would be expected, surveys indicate that larger firms
(500 or more employees) are more likely than smaller ones to have
preretirement planning programs, and, of those, more healthcare/educational
organizations have formal programs compared to other industries. Preretirement
planning programs can be simple or extensive and inexpensive or costly.
In some companies, the programs are developed and operated totally
by persons outside the organization, and in others, by internal personnel
or a combination of both.
Participation. Most organizations
with formal preretirement planning programs invite employees to participate
at age 55; however, some start at the age of 50 and others at 60.
Some programs let employees of any age attend the program.
Subjects covered. The most frequently
covered topics in preretirement planning sessions are financial matters
(e.g., pensions, Social Security, investments), health care, insurance,
real estate (relocation, living options, etc.), personal relationships
(spouse and family), volunteerism, second careers, and education.
Some organizations also cover legal matters, estate planning, psychological
and physiological effects of aging, and nutrition.
planning programs provide their participants with a course guide and
work sheets for note taking. Banks, colleges, etc., may have pamphlets
available. The AARP (http://www.aarp.org
) is often a valuable resource, as are local senior citizens' centers.
A multitude of retirement income calculators are now available on
Development and instruction. In
some companies, the programs are developed and operated totally by
persons outside the organization. In other companies internal personnel
or a combination of internal and external instructors and resources
offers an avalanche of information and tools to aid retirement planning.
For example, the AARP provides retirement planning, investment, and
other related information, and the American Savings Education Council
) has an interactive worksheet for estimating retirement income requirements
called "Ballpark Estimate." This tool is quick and easy to use and
provides guidelines that will help employees begin planning without
becoming frustrated with complex calculations.
Other options. As an alternative
to a formal preretirement planning program, some firms offer a retirement
interview with a company official, while others provide printed materials
on retirement and information on the Internet.