Why Baby Boomers Are Delaying Retirement—and What It Means for Employers

Many people used to look forward to retirement. However, for Baby Boomers, this dream has been put on hold. In fact, in our most recent research report, the 2025 Employee Financial Behavior Report, we discovered that 58.8% of Baby Boomers are delaying retirement due to financial stress.

This isn't just a personal finance issue—it’s an employer issue, too. As an aging workforce stays employed longer, organizations must navigate rising costs, workforce planning challenges, and productivity concerns.

The decision to postpone retirement isn’t always voluntary. Many Baby Boomers are concerned about outliving their savings, facing higher healthcare costs, and struggling with financial obligations that prevent them from leaving the workforce when planned. These factors place increased pressure on employers, affecting everything from talent acquisition to employee well-being.

So, why are so many Baby Boomers postponing retirement? And what can employers do to address the impact? Let's break it down.

The Financial Reality Behind Delayed Retirement

More Baby Boomers are delaying retirement—not because they want to, but because they feel they have to. With longer life expectancies, rising costs, and shifting financial responsibilities, many are unsure if they have enough saved to step away from work.

The decline of traditional pensions has placed the burden of retirement savings squarely on individuals, relying primarily on 401(k) plans and personal investments. However, unexpected financial setbacks—like the 2008 financial crisis—wiped out a significant portion of savings for many. Having an emergency fund is crucial to handle such setbacks and achieve financial stability. Add in rising healthcare costs and uncertainty around Social Security, and it’s no surprise that retirement feels out of reach for many Boomers.

For some, the challenge is even greater. Many are still financially supporting adult children who are burdened with student loan debt or struggling to establish careers. The pressure to help family members while securing their own future is forcing many to stay in the workforce longer.

Here are some of the biggest reasons Baby Boomers are delaying retirement:

• Insufficient savings – Many nearing retirement age simply don’t have enough set aside to feel financially secure.
• Rising cost of living – Inflation, housing costs, and increasing medical expenses are making it harder to retire comfortably.
• Market volatility & recession fears – Economic uncertainty makes many hesitant to rely solely on their investments.
• Lingering debt – Mortgages, credit card debt, and even their children’s student loans are keeping some Boomers in the workforce.
• Lack of financial literacy – Many don’t have a clear picture of how much they really need for a stable retirement.

This financial strain doesn’t just affect individuals—it impacts the workplace too. Employees who feel financially insecure are more likely to experience stress, which can lead to reduced productivity, higher absenteeism, and delayed succession planning for businesses.Helping employees gain financial clarity and confidence isn’t just a benefit—it’s a necessity. Employers who offer meaningful financial wellness programs can make a real difference in their employees’ ability to plan for the future, reduce stress, and retire on their own terms.

Understanding Employee Financial Stress

‍Employee financial stress is a growing concern for employers, as it can significantly impact employee well-being, productivity, and job satisfaction. Financial stress can stem from various sources, including debt, living expenses, and financial uncertainty. According to a recent study, 60% of full-time employees are stressed about their finances, with 47% of employees earning $100,000 or more per year also experiencing financial stress.

Several factors contribute to financial stress among employees:

• High levels of debt: Many employees are burdened with credit card debt, student loans, or mortgages, which can be overwhelming.
• Insufficient emergency funds: Without a financial cushion, unexpected expenses can create significant stress.
• Limited financial knowledge: A lack of financial planning skills can lead to poor money management and increased anxiety.
• Rising living expenses: Inflation and the increasing cost of living make it harder for employees to make ends meet.
• Uncertainty about the future: Concerns about job security and retirement savings add to financial stress.

Employers can play a crucial role in helping employees manage financial stress by offering financial wellness programs. These programs provide access to financial education and resources, promoting a culture of financial well-being. By addressing the root causes of financial stress, employers can help their workforce achieve better financial health and stability.

The Emotional Toll of Delayed Retirement

Financial stress isn’t just about numbers—it takes an emotional and psychological toll as well. Many Baby Boomers who expected to retire by a certain age are now facing disappointment, frustration, and even anxiety as they adjust to the reality of working longer than planned.

For some, this can lead to burnout and decreased job satisfaction, particularly if they are in demanding roles that require high levels of energy and commitment. The fear of outliving savings and becoming a burden on family members can contribute to feelings of helplessness and stress, impacting both personal well-being and workplace morale.

Employers should recognize that mental health support is just as critical as financial planning resources. Providing access to counseling services, stress management programs, and employee assistance programs (EAPs) can help older employees manage the emotional challenges associated with delayed retirement. Improving employee financial well-being through personalized education, access to financial advisors, and practical assistance with everyday money challenges can also alleviate some of the emotional stress associated with delayed retirement. A workplace culture that fosters compassion and open dialogue around financial stress can create a more supportive environment for employees navigating these challenges

Generational Workplace Dynamics

As Baby Boomers delay retirement, the workplace is becoming increasingly multigenerational, bringing both opportunities and challenges. Younger employees, particularly Millennials and Gen Z, may feel frustrated by slower career advancement as senior employees remain in key roles for longer than expected. This shift can lead to bottlenecks in promotions and leadership transitions, potentially affecting morale among younger workers eager to take on new responsibilities. Addressing employees' financial well-being can help mitigate some of these workplace tensions, as financially stressed employees are more distracted and less engaged, which can lead to high turnover rates in a competitive job market. At the same time, Baby Boomers may feel undervalued or sidelined as workplaces prioritize younger talent in areas like digital transformation and innovation.

To address these dynamics, employers can foster cross-generational mentorship and knowledge-sharing programs. Encouraging Baby Boomers to mentor and train younger employees ensures valuable institutional knowledge is retained while also providing senior employees with a meaningful way to contribute. Additionally, offering leadership development pathways for younger workers can help maintain engagement and career growth opportunities despite delayed retirements. By fostering a workplace that embraces generational diversity, employers can create a more collaborative and innovative environment where employees of all ages feel valued and supported.

Government Policies & Legislative Considerations

As retirement patterns shift, government policies may evolve to address these changes. Potential adjustments in Social Security, Medicare, and employer retirement plan regulations could have an impact on both employees and businesses. Employers need to stay informed about legislative developments and consider how they might affect workforce planning. Providing employees with resources on retirement planning, benefits education, and financial counseling can help them make informed decisions about their future.

Additionally, fostering workplace policies that support phased retirement, flexible work arrangements, and continued benefits for older employees can help businesses adapt to the changing retirement landscape. Financial wellness initiatives can be part of these policies to support employees' financial stability. By staying proactive, employers can create a work environment that balances financial security for employees with strategic workforce planning.

Why Employee Financial Stress Is an Employer’s Concern

Financial stress doesn’t stay at home—it follows employees to work and impacts performance, engagement, and even retention. When employees are burdened with money worries—like student loans, unexpected expenses, or inadequate savings—they can be unable to focus and be productive.

This stress can also lead to:

• Higher absenteeism and turnover – Employees facing financial strain may seek higher-paying jobs or be forced to take time off due to stress-related issues.
• Challenges in attracting top talent – Job seekers increasingly prioritize employers who offer meaningful financial support.
• Increased healthcare costs – Chronic financial stress is linked to anxiety, depression, and other health issues, leading to higher medical claims.

By recognizing the impact of financial stress, employers can implement proactive solutions—like financial wellness programs and personalized financial guidance—to support their workforce and improve business outcomes. Financial wellness solutions can provide comprehensive support to employees, improving their financial lives and overall productivity.

The Impact of Financial Stress on Employees

Financial stress can have an impact on employees, affecting their mental and physical health, productivity, and job satisfaction.

According to our recent study, financially stressed employees are more likely to experience:

• Anxiety and depression: Constant worry about finances can lead to mental health issues.
• Sleep disturbances and fatigue: Financial stress often results in poor sleep quality, leading to fatigue.
• Decreased productivity and focus: Employees preoccupied with financial worries are less productive and more prone to errors.
• Increased absenteeism and turnover: Financially stressed employees may take more time off work or seek higher-paying jobs elsewhere.
• Decreased job satisfaction and engagement: Financial stress can lead to disengagement and lower job satisfaction.

The impact of financial stress extends beyond the workplace, affecting employees’ personal relationships and overall well-being, leading to a decrease in quality of life. Employers can help mitigate these effects by offering comprehensive financial wellness programs that address the root causes of financial stress. By providing employees with the tools and resources they need to manage their finances effectively, employers can foster a healthier, more productive, and engaged workforce.

How Delayed Retirement Affects Your Organization

As more employees postpone retirement, businesses face new challenges. Financial wellness services can help address these challenges by supporting employees' financial health. Here’s how it impacts the workplace:

1. Reduced Productivity & Engagement

• Employees experiencing financial stress are more distracted and less engaged. Employee financial wellness programs can help reduce this stress and improve engagement.
• Studies show financially stressed employees spend 3+ work hours per week worrying about money.
• Decreased motivation and focus can lead to performance issues and costly errors.

2. Increased Healthcare Costs

• Financial stress contributes to anxiety, high blood pressure, and other stress-related illnesses. A financial wellness program can help reduce these health issues by alleviating financial stress.
• These health issues lead to higher absenteeism and increased employer healthcare expenses.
• Mentally and physically strained employees are more likely to require long-term medical care.

3. Workforce Planning Challenges

• Delayed retirement slows career growth opportunities for younger employees.
• Succession planning becomes more difficult when senior employees stay in roles longer than expected.
• Employers may need to adapt work environments to accommodate an aging workforce, including ergonomic adjustments and training programs.

4. Higher Labor Costs

• Older employees typically have higher salaries and benefits costs.
• Retaining employees past traditional retirement age can increase operational expenses.
• Companies may need to restructure benefits offerings to align with the needs of a multigenerational workforce.

Employer Solutions: Supporting Financial Wellness & Retirement ReadinessEmployers can take proactive steps to help employees achieve financial stability and retirement readiness. Financial wellness solutions can provide comprehensive support for managing personal finances and preparing for retirement. Here’s how:

1. Implement Workplace Financial Wellness Programs

Providing financial education and guidance can empower employees to take control of their finances. These programs can enhance employee financial wellness and reduce stress. Consider offering:

• One-on-one financial coaching – Personalized guidance on budgeting, debt management, and retirement planning.
• Workshops on key financial topics – Budgeting, investing, and maximizing 401(k) contributions.
• Emergency savings programs – Helping employees build financial security for unexpected expenses.
• Debt counseling services – Support for reducing financial burdens and improving long-term financial health.

2. Enhance Retirement Planning Support

• 401(k) matching programs – Encouraging better savings habits.
• Retirement planning tools & calculators – Helping employees visualize their financial future.
• Social Security & Medicare guidance – Clarifying benefits and enrollment options.
• Personalized financial planning sessions – Assisting employees in building customized retirement strategies.

3. Introduce Flexible Work & Phased Retirement Options

• Part-time roles or consulting opportunities – Allowing experienced employees to contribute while reducing hours.
• Gradual workload reduction – A phased approach rather than an abrupt exit.
• Mentorship programs – Encouraging knowledge transfer between retiring employees and younger workers.
• Job-sharing arrangements – Creating flexible work structures for aging employees.

The Employer’s Role in Financial Wellness

Delayed retirement isn’t just a personal issue—it has real consequences for businesses. Financial stress affects productivity, healthcare costs, and workforce planning. By investing in financial wellness programs and retirement planning support, employers create a win-win scenario: employees gain financial confidence, and businesses benefit from a healthier, more engaged workforce. Retirement shouldn’t feel out of reach for your employees. By offering financial wellness programs, retirement planning resources, and mental health support, you can help them feel more secure about the future while boosting engagement and productivity.

These programs can positively impact employees' financial lives and overall well-being, enhancing their financial capabilities and understanding.

Want to make a real impact? Start by evaluating your current benefits and exploring new ways to support your team’s financial well-being. Small changes today can lead to a more confident and prepared workforce tomorrow.