Transcripts

"Money File"-Employer Retirement Worries

SUSIE GHARIB: Tonight's "Money File" has a few thoughts on the tough choices facing employers. Eric Schurenberg, editorial director of Bnet Moneywatch, continues our series "Reviving the Economy: What Should Business Do?"

ERIC SCHURENBERG, EDITORIAL DIRECTOR, BNET MONEYWATCH: The United States has a retirement problem. This is not news. We have known for years that there are simply too many citizens who've saved too little and who will live too long. But there is a fix and a fairly elegant one. To retire well, Americans need to retire later. The average worker checks out now between 62 and 63, but delaying beyond that even a little can make a huge difference in financial security. If a middle income couple retires at 70 instead of 62, for example, they reduce the nest egg they need to live comfortably from more than half a million dollars to just 118 grand. The only problem is knowing that it makes sense for Americans to work longer doesn't mean they'll be able to. On average, older workers are less productive and businesses, logically enough, have reservations about hiring them and few reservations about laying them off. But American business could help by not setting older workers up to fail. Lots of employers have doubts that older workers can learn new technology. That's not true. They may need a different kind of training, but they can learn. Employers could also do everyone a favor by putting more effort into helping employees save smarter in their 401(k)s. By the way, suspending the employer match in tough times, as FedEx and Motorola among others recently did, is not the right message. Yes, we still need to push back the expected age of retirement. But it we get employees to save smarter, we won't have to push it back so far. I'm Eric Schurenberg.