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How does burnout and stress affect how employees handle retirement readiness decisions?

0 2 years ago

Burnout leads to terrible decisions. Even if your employees aren’t burning the midnight oil at your company, their spouses may be or they may be overwhelmed with caregiving responsibilities for a parent or child. As they burn the candle at both ends, they may be making financial decisions that are equivalent to lighting piles of money on fire. While burnout doesn’t have a specific diagnosis code in the medical books or psychological manuals, the results of overworking with limited flexibility are so similar that burnout can be considered a syndrome.

‍How can burnout effect decisions about retirement? Symptoms of burnout are usually thought of as fatigue, exhaustion (both physically and emotionally) they can also include sleeplessness and insomnia. Each of those symptoms impacts concentration and attention, decreases in both would make even the savviest saver make mistakes. But forgetfulness and lack of concentration aren’t the only ways that burnout can impact retirement readiness.

‍Decision-making ability decreases the more decisions are made. Employees (or their spouses) that are constantly weighing options, like whether to leave a job or whether to move a parent into a nursing home, may be depleting their decision-making skills by running through options repeatedly without getting to a result. For those that do have to make constant trade-offs, like juggling elder care with child care and finagling the details of dinner on the run, their mental energy reserves run lower and lower. That means that in addition to the lack of concentration that a burned out employee may have, their ability to weigh options is suffering.

And even worse, the biggest impact of burnout on an employee is lack of productivity. This may be the biggest area of impact on retirement readiness. Employees that put off enrolling in your company’s retirement benefits will continue to shuffle that task down the to do list until its forgotten. Putting off making retirement contributions means your employees are losing out on the positive benefits of compound interest or any matching options that your company may offer.


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