You should encourage your employees to stay in the workforce for as long as possible. If they decide to retire before turning 66, the consequences could be dire—both for your company and for them.

A recent article in USA Today reveals that many baby boomers are retiring prior to the age of 66. As a result, these employees will suffer a 25 percent loss in Social Security benefits over the long term due to greater taxes levied on their retirement savings.

Advising employees on the benefits of waiting to retire is a win-win situation, both for them and for you. Your employees win because waiting enables them to claim the fullest share of their Social Security benefits and lower taxes on their retirement savings. And you win because: (a) you have extended access to their accumulated knowledge and experience; (b) you don’t have to immediately worry about the cost of hiring and training their replacements; and (c) if these older workers are Non-Highly Compensated Employees, their extended presence on your payroll could be beneficial with regards to Contribution Nondiscrimination Testing.

If you currently sponsor a NADART plan, we can assist in discussions about these and other retirement-related topics via our Enrollers service. The NADART enrollers travel to your place of business and meet with you and your employees to answer any questions you may have. If you don't currently sponsor a plan or are thinking of changing retirement providers, and would like more information on our products and services, please contact the us at (800) 462-3278, ext. 7161 or nadart401k@nada.org.