Aiding Employees With Retirement Planning Boosts Retention
Maintaining a positive work-life balance is one of the primary concerns facing employees today. These hard workers expect a reciprocal relationship of mutual support with the investment of their time, talent and growing skills into a company over the years. When an employee feels undervalued or burned out, they move on to greener pastures.
Retirement doesn’t feel like a realistic goal for many employees today. Of those over 65, nearly 19 percent were working as of 2017, and by 2024, that number increases to 36 percent of those between 65 and 69 needing to work. Among U.S. workers, 79 percent expect they will need to supplement retirement income by working.
Some want to work late in life, but many need to work to survive. Workers of all generations now push their retirement date farther away, and the outlook isn’t promising for millennials and future generations. Helping employees plan for their retirement relieves a major burden and will keep them around in the long-term.
Address Employee Financial and Retirement Concerns
Employees worry about making it from paycheck to paycheck and try to live in the present. That makes planning for retirement more concerning and terrifying — 30 percent of employees feel stressed by retirement planning, mentally and emotionally.
Employers should call upon HR and benefits departments to discuss opportunities to help employees learn from financial education programs and get acquainted with additional resources. Employees must understand the specifics of their benefits beyond someone handing them a brochure or packet. Employers may include helpful tools and resources in these packets and going over the details together as a first step.
Doing the math is half the battle. Using a retirement calculator will help employees stay on track with their contributions to their retirement accounts, advising them whether to increase or decrease deposits based on their lifestyle and needs. Millennials deal with paying back college loan costs, and future retirees may look for a smaller home and need to investigate mortgage possibilities. Financial calculators can help with all of these planning concerns and more.
Employees who plan retirement on a budget feel concerned and at a loss of how to plan and save for retirement when living paycheck to paycheck. No matter how small a contribution is, it still matters and doubles in size with matching employer contributions. Stress this fact to employees, and encourage them to automate a consistent portion of their paycheck to their retirement savings. Some 401(k) plans increase savings rates over time, and some don’t. Employees deserve to know these ins and outs.
Do Employees Understand Their Health Care Benefits?
Employers expect new hires to ask about the details of their health care package from the beginning, but employees may not know how to ask the right questions. About half of workers don’t understand their benefits and 56 percent desire assistance in signing up for employer-sponsored plans. Making this a part of a pre-onboarding program will help new hires and employees cultivate a better work-life balance and know how their health care work for them when retirement hits.
No one plan fits all employees. Employers and provided plans must address individual needs, and offering on-site screenings, wellness fairs, education programs and one-on-one meetings bridges the misinformation gap. Employers should also revisit plans with changing health care needs of employees.
Health Savings Accounts (HSAs) Offer Financial Reprieve
As of 2016, HSA enrollment increased by 19.1 percent with large employers and 16.3 percent with smaller companies. Many employers offer HSAs as a way to supplement a reduction of plan offerings. Unfortunately, those who are HSA-eligible but not enrolled fail to benefit from using pretax cash to cover health services qualified under the plan.
Employers increasingly contribute to HSAs as they see the benefits for both employees and the company, and those in consumer-driven health plans (CDHPs) are more cost-conscious, choosing generics over brand names, for example. HSAs cover qualified medical costs, but they also help save for the long-term since dollar amounts roll over and offer several tax advantages, such as writing off your contributions. Later in life, retirees can withdraw money retirement and medical needs when over age 65 without penalty.
When an employer offers a benefit, employees must understand those benefits. Circumstances change, and communication during tax season or open enrollment periods only don’t suffice. Continuous open communication helps develop mutually beneficial employee and employer behaviors that lead to less stress and longevity at a company that cares.
Conduct surveys and sit down over coffee with employees to learn about their concerns. What screenings and on-site education programs and services do they want? What do they not understand? Encourage employees to speak with supervisors, HR and benefits professionals regarding any changing circumstances or concerns.
Access is key to relieving the burden of planning for retirement, and both employers and employees must play an active role together. The rewards are abundant — improved retention, work culture and peace of mind.
Sarah Landrum is a career expert and the founder of Punched Clocks, a career and happiness site for young professionals. Want more advice on keeping employees happy and engaged? Follow Sarah on social media and subscribe to her newsletter.
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