The Retirement Challenges for Physical Workers
May 30, 2019
“How old do you want
to be when you retire?” That’s a question posed by financial planners, friends,
family, associates, retirement providers, and, most importantly, ourselves. For
many of us, it’s a question that doesn’t have an easy answer. There are a lot
of things to think about. How much have
we saved? How much debt are we in? Where do we want to retire? What type of retirement
lifestyle do we want? How long will our retirement income last?
How often have you
heard someone say, “I’ll never retire”? Many times people think they will
retire at age X, when something unexpected happens to change that. It could be
that there is a company organizational change that becomes untenable, a family
member needs a caretaker, or you’ve been asked to take early retirement. It
could also be that the type of work you do has physical requirements that,
whether we want to admit it or not, become more difficult to maintain as we
The fact is, physical workers face challenges that non-physical workers do not. One of these is the reality that many of those workers will need to retire earlier than anticipated or even desired – and before they are financially ready to make this transition. This challenge was the focal point of a recent study conducted by the Aegon Center for Longevity and Retirement, and Transamerica Center for Retirement Studies. This survey, “The Unique Retirement Challenges Of Workers In Physically Demanding Jobs”, examines the issues physical workers around the world face when preparing for retirement. The study is a must read for those employers in the construction and contracting trades.
The survey found that
physical workers are less likely to think that they are on target to meet their
retirement income goals. They are not what is considered “habitual savers” and
the majority have no backup retirement plan. Furthermore, 39% of retirees in
the survey, including both physical and non-physical workers, retired earlier
than anticipated. With the demands on their bodies, it would be reasonable for
physical workers to do all they can to maintain good health – after all, their
livelihoods depend on it. However, only 38% of the physical workers surveyed
say they take their health seriously.
So what can be done?
The study’s authors provide several recommendations for employers, workers
themselves and policy makers to consider. Employers can offer retirement plans,
with or without a match, and make it easier for physical workers to remain in
the workforce longer by offering transitional plans such as a reduced work
schedule or different positions within the company. They can also support
healthy lifestyles and provide opportunities for physical workers to keep their
skills up to date. Physical workers can take a greater interest in their health
and well-being, explore ways to update their skillset, particularly in an ever-evolving
labor market, and create a retirement strategy. Policy makers can encourage
more financial literacy programs and skills training as well as promoting
workplace retirement savings programs.
We’re all getting
older! While planning for retirement may not be something we like to think
about, physical workers also bear additional retirement risk simply due to the
nature of their work. There are actionable solutions available to counteract
this reality. By working together, employers and workers can mitigate these
issues so that for physical workers, the question, “How old do you want to be
when you retire?” is easier to answer.