When you’re just starting out in your career, retirement can seem like a million miles away. It’s tough to look forward 50 years and imagine your lifestyle. But one thing’s for sure: Money will always be a precious and needed commodity.
Unfortunately, many young employees haven’t prioritized their retirement, even though they know they should. According to Motley Fool research, a whopping one-fifth of adults haven’t saved a dime for their inevitable retirement years. And a third of the people who have socked away a little admit their retirement nest egg amounts to a paltry $5,000 or less. That’s barely enough to get through a month’s worth of bills in many places.
Making their retirement your business
As a business leader, you can help your team members avoid hitting their 60s and 70s with nothing (or barely anything) to show for their years of hard work. Though you technically aren’t under an obligation to offer staffers any type of retirement assistance or perks, doing so will make your organization more attractive to talented performers seeking high-quality benefits. Plus, you can get some benefits when tax time rolls around.
Below are five solid ways to give your employees the information and platforms they need to feel financially secure about their retirement.
1. Understand your retirement savings options.
Foremost, you’ll want to investigate the pros and cons of offering different retirement savings choices for your employees. After all, not every choice will be right for your corporate structure. In general, the small business 401(k) remains a popular selection. However, 401(k)s come in a variety of forms, such as standard profit-sharing plans versus SIMPLE arrangements.
The more you know about the retirement savings you can provide your team, the easier it’ll be to select one that works for your company and workers. For instance, you may be able to cut your annual taxes if you deliver the right 401(k) or other retirement savings program. At the end of the day, the retirement savings help you offer to employees should be a boon for everyone.
2. Look for retirement savings packages with easy ramp-ups.
Employees appreciate being able to log into their retirement accounts and see what’s happening in real time. Yet not every retirement package or provider offers an easy-to-navigate online portal. Your job is to find one that’s simple and straightforward to use, providing intuitive navigation.
The best way to uncover breezy, secure retirement platforms is to take them on a test-drive yourself. No time to do the legwork? Select a committee of other executives at your company to conduct research. Your ideal retirement savings package provider should put a premium on customer services and streamlined usage. If you’re confused by a portal, chances are good that your workers will be, too.
3. Seek out retirement vehicle providers with transparent fees.
As an employer, you should always know how much you’re going to be charged when working with any retirement savings provider. Ask about hidden fees and unadvertised costs before signing any contractual arrangement. The last thing you want is to be hit with unexpected bills.
Similarly, be sure to collect all the information on what your employees may have to pay later. Usually, providers will give you sales collateral to distribute to your workers that cover these topics. Still, you’ll want to make sure that the verbiage makes sense and isn’t confusing. Remember: The simpler it is to opt into your retirement benefits, the more employees will participate.
4. Hold retirement savings workshops throughout the year.
Never assume that your employees understand the value of saving for retirement, or of contributing the maximum 401(k) amount. Many team members have not had extensive personal financial management training or education. You can change that by offering them the opportunity to learn more about saving for retirement.
As an example, you might want to host annual or semi-annual workshops on the topic of retirement. Who belongs at the head of your workshop? You might want to pick a financial planner, a representative from your 401(k) platform, and a human resources professional. Make the event easier and safer to attend in a social distanced way by hosting it online through Zoom or Microsoft Teams. That way, any staffer who’s interested can just log in from headquarters or a remote work location.
5. Help older workers transition into retirement.
Many times, employers focus on their younger workers when creating retirement-related benefits packages like 401(k)s. But what if you have some people on your team who are in their 50s or 60s? They’re nearing retirement age and may have vastly different needs and questions than Generation Z or Millennial employees.
Consider how you can make the transition into the retirement years less challenging and complicated for the older members of your staff. You might want to moderate an online panel discussion aimed specifically at how to make the move into partial or full retirement. Or you could work one-on-one with personnel to find out whether they intend to retire at all. As a recent Transamerica Center for Retirement Studies survey showed, 54% of adults are either going to retire early or skip the whole idea of retirement. It’s up to you to find out which members of your retirement age team are in each camp.
You’re only as strong as your people. Why let them worry about retirement or fret about how little they’ve saved for their later years? Offer them the information and assistance they deserve to get on a better financial path for the future. In exchange, they’ll be more likely to give you their loyalty, productivity, innovation, and attention.