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Help your employees save and prepare financially for retirement

Help your employees save and prepare financially for retirement

The statistics are grim. A recent study by the National Foundation for Credit Counseling found that 46% of Americans have less than $10,000 saved for retirement. (Employment Benefit Research Institute). More and more employees who haven’t saved enough for retirement are continuing to work, not because they want to work, but because they’re forced to work. This decreases workplace productivity and morale, and increases payroll and health care expenses.


Do reinvent your retirement education program at work

The once-a-year 401(k) lunch and learn for employees may not be working. Many employees find these events boring or confusing, especially when focused on investment options and allocations. Employees need this information, but they may need better financial habits more than technical knowledge. If your “retirement program” at work consists of one hour-long seminar per year, it’s time to go back to the drawing board.

Do create a comprehensive retirement program

A solid employee retirement program includes two main areas - education and accountability. Education can be disseminated by online or live presentations that focuses on investments, savings, Social Security, etc. Then comes keeping employees accountable by encouraging them to speak with a professional one-on-one. Financial professionals will typically help employees each year with sticking to their goals.

Do offer special help to employees over 50

Although all employees should have access to the same retirement education, employees over age 50 pose the greatest financial risk to employers. They are closer to retirement than other employees and likely aren’t on track to retire at normal retirement age.

Do pay it forward - hire a workplace CFP

If a three year retirement delay costs your company $10,000 for each employee, paying a CERTIFIED FINANCIAL PLANNER professional to assist employees with retirement preparedness may save your bottom line. Either way, the costs may occur, so paying for preventive help may cost less.

Do make retirement planning part of the wellness program

Personal financial wellness is just as important as physical or emotional wellness. If your company has a wellness program, be sure to include the retirement and financial component.


Do not think it’s not your responsibility as an employer

If an employee cannot afford to retire, they are forcing themselves to come to work everyday. They have no other choice. This type of employee may be a drain on productivity, morale and even health care costs. Retirement preparedness becomes an employer’s problem, just as much as an employee’s problem.

Do not just rely on online retirement tools

Do you enjoy spending your free time on the computer researching topics that are boring or confusing? This is what online retirement education feels to many employees. Not surprisingly, many employees forgo ever using online retirement tools.

Do not assume employees are receiving their own retirement advice

Assuming employees have financial advisors helping them navigate towards retirement is assuming too much. If 60% of Americans don’t have a budget, it’s safe to assume most don’t receive professional financial advice (Employment Benefit Research Institute).

Do not forget retirement unpreparedness can lead to greater health care costs

Stress about financial topics such as retirement can lead to health issues such as sleep apnea, ulcers, migraines and even heart attacks. Prepare your employees before they know the stress of not preparing for their retirement.

Do not delegate all responsibility to the HR department

Encouraging better financial habits starts with solid leadership in any organization. Although the human resources and benefits department may be in charge of any retirement plan related project, asking employees to step up their “retirement game” takes strong leadership. Lead by example.

Jumping cartoon

Employers may not think about ill-prepared retirees hurting their bottom line, but it will become evident as the baby boomers continue to step into their 60s. By then, it may be too late for employers to encourage any meaningful changes for pre-retiree employees. Retirement is often the single most difficult financial task for any American. With Social Security only covering 40% of most American’s retirement income (Social Security Administration), employees are expected to surmount large amounts of cash relative to their salaries before being ready to retire.

When employees need more time to grow their retirement nest eggs, this forced work turns into a productivity drag for employers and increased stress for employees. Employers need to realize this fact and become taking outside the box steps to help employees accomplish their goals. Although these efforts may cost an employer, it may cost much less than having unproductive employees.

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Travis W. Freeman, CFPPresident

Travis Freeman is the President of Four Seasons Financial Education, a regular contributor to local and national media such as Fox and NBC news, the author of Make Your Money Work and a national financial literacy advocate. ...

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