Retirenment

I rarely write about work on this blog because it's mostly a family blog i.e. read by my family, about my family.

But yesterday I had an employee who so staggered me that I just feel the need to post. I'm going to be vague about some things because that's just good HR practice. If this is already too boring move on and wait for something better tomorrow. My feelings wont be hurt, I swear.

Yesterday, I had an employee ask me if we, as a company, differentiate between Retirement or voluntarily leaving the company. I advised her that we don't make any distinction but that if she retires she has the option of taking some health benefit access with her.

The health access we offer employees isn't great. It's essentially their health plan but now they pay the entire cost, instead of the company subsiding a portion. Sometimes it's more expensive than COBRA. The reason someone might elect it would be because COBRA runs out after 18 months (unless there is some type of hardship and then it can be extended a few extra months) and this health access can go on indefinitely. In case you don't know, COBRA can be prohibitively expensive, cost $1000 or more per month for a family to get coverage. I've heard of it being worse at other companies. It's spendy.

So we kept talking a little bit and she asked me about retirement. Did we pay her money? What is that statement she gets once a year? She really misses the stock purchase program we had for employees years and years ago. Does she contribute to 401k?

No, you didn't mis-read me. She asked if she contributed to 401k. She didn't know.

This employee was in her 60's. Younger than Medicare age but old enough to start looking hard at Social Security benefits.

As we kept talking I came to realize that she had honestly no idea what Retirement was. To me, retirement is a definition. It's something that is going to happen. To her it was a big sign post in the sky that meant when she stopped working she would get money.

For the record, my HR definition of retirement is when you leave your career or workforce and stop earning a large enough income to support yourself with no other means of support.

That statement she gets once a year? It's from the Social Security Administration. She didn't know what SS was either, by the way. I had to explain it.

She had worked for the company since I was 8 years old. But she had no idea if she had a pension. (She did) She had no idea what was in it. She didn't know she was contributing to a 401k. Luckily my company defaults employees to 3% unless they are already contributing more than that. They have to elect not to contribute. In her case that was a really good thing.

I asked her how she had planned to retire and I got silence from her. She told me she had never really thought about where the money to pay her bills once she retired would come from.

Now, I understand someone even my age not totally "getting" retirement. I do. There is a lot out there and people my age are constantly being told to prepare for the worst, that SS wont be there for us, that 401ks are tanking, the stock market is crashing etc. Knowing what to do to save for retirement is confusing and scary.

But in your 60's? It's past time to take your head out of the sand and pay attention.