How Can Employers Help Older Employees Drowning In Debt?

As the age of retirement approaches, older employees are more likely than ever to find themselves burdened by debt. Whether it's from mounting medical bills, unexpected emergencies, or simply the everyday cost of living, financial struggles can significantly impact one's quality of life.

Fortunately, employers are recognizing the need to support their older workforce – the question simply becomes how.

Financial wellness benefits encompass a wide range of programs designed to help individuals manage their money effectively and build long-term financial security.

While these benefits can help employees at any stage in life, they hold particular value for older workers struggling with debt. This article will take a look at how these benefits can make a significant difference in the lives of these individuals.

Older Employee Statistics

Before diving into the benefits of personalized financial wellness programs, it's important to understand the scope of the issue.

The number of older Americans carrying debt into their retirement years is rapidly increasing, according to the National Council on Aging (NCOA). In fact, the percentage of households headed by individuals aged 65 and older with debt has risen to 60% as of 2016.¹

Breaking down these debts, nearly four million adults in this age range had unpaid medical debt right before the pandemic hit in 2020.

The NCOA's survey found that over a third of older Americans were also struggling with credit card debt, and another 30% owed a median amount of $68,500 on their mortgage/home equity line of credit.

Why Financial Wellness?

It may seem easier to simply offer older employees higher wages or to provide one-time bonuses to help alleviate their debt burden. However, comprehensive financial wellness benefits offer a more holistic and sustainable approach to addressing the root causes of financial stress.

Financial wellness programs typically include services such as financial coaching, budgeting assistance, debt management strategies, and retirement planning education.

By addressing these key areas of concern, employers can empower older employees with the tools and knowledge they need to take control of their finances.

Reducing Financial Stress

One of the most significant impacts of financial struggles on older employees is increased stress levels.

According to Bankers Life Center for a Secure Retirement (CSR), only a third of baby boomers surveyed expected to retire debt-free, with almost half anticipating the need to work either full-time or part-time during their retirement.²

This is largely affected by the 2007 economic crisis, and this stress still affects their daily lives. Roughly two-thirds are worried about another financial crisis occurring in their lifetime, and many anticipate having no savings or inheritance to pass to their kids.

Keep Reading: 31 Best Employee Benefits to Provide During a Recession

By offering financial wellness benefits focused on budgeting assistance and debt management strategies, employers can alleviate some of this stress by providing individuals with the skills needed to better manage their money.

Fighting Debt

Consolidating debt is another way that financial wellness benefits can help older employees.

Debt consolidation involves combining multiple debts into a single loan, often with a lower interest rate and more manageable payment terms. This can make payments more affordable and simplify the repayment process.

In addition to helping employees tackle their debt, consolidation can actually help raise credit scores and promote better credit habits in the future, according to TransUnion.³

Employers can partner with financial institutions to provide resources and guidance on debt consolidation options, helping older employees navigate the process effectively.

Additionally, employers themselves may offer low-interest loans as part of their financial wellness benefits, making it easier for employees to consolidate their debts.

Preparing For Retirement

Did you know that roughly a quarter of retirement-age adults are still in the workforce? That number is expected to increase to over 30% by the end of the decade, according to the U.S. Bureau of Labor Statistics.⁴

For many older employees struggling with debt, retirement may seem like an impossible dream. However, financial wellness benefits that include retirement planning and overall financial education can provide hope and practical solutions.

By offering workshops or one-on-one consultations with retirement planning experts, employers can assist older workers in creating achievable plans for saving and investing in their later years.

This may involve adjusting contribution rates to employer-sponsored retirement accounts or exploring alternative investment strategies.

Final Thoughts

Financial wellness benefits are becoming increasingly crucial in helping older employees navigate the challenges of living with debt. Recognizing the unique needs and circumstances faced by older workers in debt is essential for employers hoping to support these individuals through financial empowerment.

By incorporating a holistic financial wellness program into their employee benefits, organizations can help alleviate financial stress and provide a pathway to financial stability for their older employees.

If you’re unsure where to start, look no further than Enrich. With its comprehensive suite of financial wellness solutions, Enrich provides the resources, tools, and support necessary to empower employees of all ages to take control of their finances.

Take the first step in boosting the financial well-being of your older workforce. Contact Enrich today for a demo, and see how the platform can make a difference in the lives of your employees.

1 - https://ncoa.org/article/get-the-facts-on-senior-debt

2 - https://www.prnewswire.com/news-releases/boomers-eroding-confidence-further-redefines-retirement-study-reports-300498853.html

3 - https://newsroom.transunion.com/debt-consolidation-often-results-in-higher-credit-scores-and-better-credit-performance/

4 - https://www.bls.gov/emp/tables/civilian-labor-force-participation-rate.htm