More than 60% of employees are counting on a defined-benefit pension plan to fund retirement, even though they acknowledge that the system is moving away from that traditional savings system.
Among workers whose employers have reduced their retirement benefits, nearly 40% say they haven’t done anything to pick up the slack.
Indeed, recent surveys show almost half of workers report they have saved less than $25,000 for their golden years.
Your organization can help employees build their nest eggs. Here are six ways:
1. Arrange for your employees to have face-to-face access to a financial advisor. Your organization can pay for the service or split the cost with your employees. More than 40% of employees in one recent poll found the advice of a financial professional more helpful than other forms of financial education. Least helpful, they said, were online professional investment-advice services.
2. Establish a voluntary payroll-deduction program that automatically deposits money into a 401(k). The employee can choose how much he or she wishes to contribute. It’s easier to put aside money that you don’t see.
3. Open a SIMPLE IRA plan. It’s a retirementsavings vehicle that allows employees of small businesses—often shut out of 401(k) plans—to save money for retirement tax-free. Annual administration fees are small and it offers tax advantages to both employees and employers that have no other retirement plans.
For more 401(k) options for small businesses, visit www.irs.gov/pub/irs-pdf/p4222.pdf.
4. Offer automatic 401(k) enrollment immediately to all employees. In companies that offer automatic enrollment, employee participation is about 14% higher than in firms that wait for workers to enroll themselves.
5. Provide savings information directly to individual employees so each employee will understand exactly how much money he or she will need for retirement, and how much needs to go into a savings plan now. Handing out literature and holding seminars are fine, but recent studies show it’s more effective to personalize the education.
6. Encourage employees to defer their raises into their retirement plans. It boosts retirement savings and employees may never miss the money.
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/14195/6-ways-to-help-employees-build-nest-eggs "