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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 age.

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.