HRA administrators, Clarity Benefit Solutions, discusses key retiree trends.
Employees who are looking forward to their golden years to enjoy life to its fullest may need assistance regarding trends that may impact their emotional and financial well-being. The following are three retirement trends that should be on every soon-to-be retiree’s radar.
HSAs as a retirement savings method. Many retirement-aged individuals have been using an HSA as a resource for retirement savings, since the funds grow tax-free. HSA funds can be applied to eligible expenses into retirement, and it does not interfere with Social Security or any other retirement funds.
An uptick in proposed retirement regulations. Many members of Congress want to create legislation to better the retirement plans of Americans. In 2018, the focus was on assisting employees who did not have access to plans and/or hadn’t saved enough to sustain themselves after retirement. This year, legislation will include the Retirement Plan Modernization Act, Retirement Security and Savings Act, the Automatic Retirement Plan Act, and the Retirement Enhancement and Savings Act (RESA). Fortunately, both parties are making these proposals a priority.
Social Security changes. With the Social Security Trust set to be dissipated by the year 2037, lawmakers are realizing sweeping reforms need to be enacted. Unlike current Social Security beneficiaries, employees turning 62 this year cannot claim their full retirement benefits until they are 66.5 years old. Fortunately, Baby Boomers are in good health, and are thus delaying their exit from the workforce, which impacts Social Security. This year will also see an increase in the Social Security tax caps—which will result in bigger paychecks. And, payments to Social Security recipients will increase by 2.8 percent.
Increased desire for a lifetime income. Research shows that Americans report a wish for a lifetime income as the number one retirement need. It is important to educate future retirees about opportunities that can provide this benefit, even when the market is in a state of uncertainty. Fixed indexed annuities (FIAs) offer the opportunity to balance a portfolio with savings vehicles that meet all retirees’ needs. Employers should offer employees financial planning seminars in addition to access to budgeting tools to help retirees map out their golden years. Plus, advances in medical technology have also extended life expectancy, which makes these opportunities even more important to take advantage of. Today’s retirees are vital, active, and social!