Are you setting up your employees for a successful retirement?
Your employees need to be able to retire—both for their own good and for the good of the company. As an employer, you want to help your employees reach their goals and build a secure, comfortable future for themselves. And in a time when economic and financial anxiety feel more present than ever before, they need your help even more.
While the pandemic has brought about significant changes in our professional and personal lives, there are some vital truths to long-term retirement planning that we must reinforce:
Creating a retirement environment
To create an environment where every employee feels empowered to save, you as a plan sponsor must do several things:
Offer plan information that’s understandable:
Communicate clearly about your plan and its options on a regular basis, but especially in times of crisis.
Advocate for the importance of saving:
When it comes to saving for retirement, the time is now.
Make saving easy:
The best way to simplify saving is to have a good default in place—automatic enrollment, with an escalating savings rate. Auto-enrollment rates of 3-4% will not get your employees where they need to be.
Tip: Consider what level most employees will need to reach to support themselves in retirement and offer a plan that gets to that level. Employees can opt to defer a smaller amount if they need to, but they’ll understand what’s required to get to a healthy retirement.
Include an employer contribution:
Allocating employer money to retirement benefits signals to your
employees that saving for retirement is important.
Provide financial wellness support:
A strong retirement environment stems from employees feeling that the answers to their questions are available to them.
- How do I balance debt and saving, while managing spending?
- How do I keep saving even when my spouse loses their job?
- Can I save for my kids’ college if I save for retirement?
- Should I adjust my strategy during an economic downturn?
- What if I need the retirement money for a medical bill?
In this case, it’s not about having the answers yourself. You can provide access to financial professionals who will help get your people on the road to a smart savings plan that aligns with their vision for retirement. Online resources, helplines they can call, and eventually in-person meetings will put their minds at ease and their money into action.
This article is provided for informational and educational purposes only and is intended to be used as a guide for planning. It should not be construed as investment, tax, financial or other advice. Data and other information provided by third parties are believed to be obtained from reliable sources, but we do not guarantee the accuracy of such information. Investing in securities involves the potential for gains and the risk of loss and past performance may not be indicative of future results.