Employers want theiremployees to find a path to a successful retirement; it makes thembetter employees today while also providing a great referral tofuture employees. Brokers can help. (Photo: Shutterstock)

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Baby Boomers (those born between 1946 and 1964) represent closeto 75 million people in the United States today. They have been thelargest generation for a very long time, with millennials just nowset to outnumber them in 2019. The difference between these twogroups is that one of them is just beginning their careers whilethe other is retiring or heading toward retirement.

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Did you know that close to 10,000 baby boomers hit age 65 everyday? And what is alarming is that the median retirement savings ofthis group is just under $180,000, for those that do haveretirement savings — 45% of this population claim to have zerosavings for retirement, yet they control over 70% of the country'sdisposable income.

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Given an aging population with little savings, challenges in theSocial Security system and a health care epidemic in terms of costsand access, we face a potential crisis. What can be done tominimize it?  The most likely scenario is that we will befaced with the need to change – at the consumer, family, employerand government/support levels.

Changes to the family unit

Given the gap between savings and lifestyles, many baby boomerswill be forced to change their habits, through cost-cutting,downsizing, curtailment in spending and increased borrowing. Theresources to do otherwise simply won't exist. Families will becalled upon to support their parents for everyday needs.Multi-generation housing relationships will increase.Transportation will move towards sharing arrangements.

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That might not be such a bad thing given the state of affairs.More tightly knit and deeply dependent family relationships couldbe a rich benefit to a country splintered in various ways. However,it would be more beneficial if we elected this path and were notforced into a new way of life out of necessity.

Changes within the workplace

Changes are already happening within the employer/employeerelationship. Employers are recognizing that this generation is themost informed and knowledgeable group relative to their businesses,and given the economic challenges, many are choosing semi orsponsored retirement relationships.

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In this situation, employers engage a certain group of employeesfor part-time support and service at discounted costs. Theemployers get a valuable and knowledgeable workforce at discountedrates, while the employees get much needed financial andpsychological support as they enter their retirement years.

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It should not come as a surprise that one of the biggestchallenges of retirement is not financial, but psychological.Relaxing with little resources and no purpose can be a daunting, ifnot overwhelming, emotional experience. This mutually beneficialrelationship may be a good solution for both employers andemployees.

Employers

But (there's always a but), this also presents an opportunityfor employers and benefits brokers to assist by providing necessaryservices to this group with an incredibly high disposable income.One way is to implement a financial wellness program.

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The purpose of these low-cost benefit programs is to educate andteach employees how to better plan, save, spend and borrowthroughout their careers, including the critical years just beforeretirement. Taking steps now may be their last chance to ensure alivable retirement.

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Employers want their employees to find a path to a successfulretirement; it makes them better employees today while alsoproviding a great referral to future employees. Employees want tojoin an organization that takes care of their team members (if thatdoesn't scream millennial, I don't know what does!).

Brokers

Brokers now can service the needs of employers (think healthcare, retirement plans, other voluntary benefits) as well asservice and manage the needs of individual consumers as well. Theseemployees are earning 70% of the disposable income in the UnitedStates today, and they desperately need financial services. Aproperly constructed financial wellness program ensures that theseemployees are presented with appropriate opportunities to secure amore prosperous future.

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Brokers are in the unique position to benefit by establishingthese employer-based relationships. Employees get the help andmotivation they need to invest in their future; employers get moreproductive and stable employees; brokers get to capitalize on therelationships by being in the exclusive position to offer variousfinancial services through this engaged environment.

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Perhaps this large populous of voters will create legislativechange that will increase Social Security or other governmentsupport, perhaps at the cost of the existing workforce, but thatwill not be a sustainable solution unless coupled with aknowledgeable workforce actively engaged in planning andparticipating in their future financial stability.

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Employers and brokers have a great opportunity to offerfinancial wellness tools and solutions to support a sustainablepath to retirement, while benefiting from these new offerings.

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David Kilby has been presidentof FinFit since it was founded in2008. He has grown the company from a single idea into thenation's leading Financial Wellness Benefit platform. Prior toFinFit, David led a multimillion dollar financial holding companywhere he was inspired to find ways to help employees improve theirfinancial health. At KPMG Peat Marwick, he worked with a diversegroup of public and private organizations in a variety ofindustries including automotive, chemical manufacturing, consumerfinance, managed health care, retail, real estate and wholesaleorganizations. David received his CPA designation in theCommonwealth of Virginia in 1991 and graduated from Old DominionUniversity.

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