Saving for retirement is essential for all of your employees. Offering a 401(k) retirement plan is a good way to start helping your employees plan for their retirements, but it’s not the only thing that a company can do to help.
Educate Your Employees
Financial literacy is essential to maximizing employee retirement savings. It’s important that companies don’t just trust that their employees know what they’re doing already. Many may not know how important retirement savings are, especially if they are younger and aren’t thinking about retirement yet, or how to properly invest what is in their retirement accounts. If your company doesn’t employ someone who can offer educational opportunities for employees to learn about finances and financial planning, then bringing in a third party financial advisor who can help to educate will go a long way towards helping your employees plan their retirements.
Assess Employee’s Current Retirement Plan
Part of that financial education can be to offer an assessment of where the employee currently stands with their retirement plan. Either someone at your company or a qualified third party can look at employee retirement plans and how they’re currently invested. Investments within the account should reflect employee comfort levels with risk, but the advice of a qualified financial advisor in Orlando, for example, can help them to learn more about investing and what is actually best for their retirement.
Offer 401(k) Matching
Offering 401(k) matching is also a great way to help employees plan for retirement. Matching means that the company contributes the same amount to an employee’s retirement account as the employee does, up to a certain percentage. Encourage employees to contribute up to the maximum amount that the company will match. Saving more early is important because that gives the retirement funds time to grow more. Many younger employees may not realize how important it is to begin saving for retirement early because retirement seems so far away.
Automatically Enroll Your Employees
Automatically enrolling your employees in a retirement savings plan as part of the onboarding process can help to get employees started with their retirement savings early. The employee will of course have to determine the amount they’re willing to contribute to the retirement plan from each paycheck. However, it’s important for employees to get used to contributing to a retirement account. If they start out making contributions, they’ll become accustomed to it and are much more likely to continue doing so. Making 401(k) enrollment a part of the onboarding process is also a good way to introduce new employees to the importance of retirement savings.
Consider Alternative Retirement Plans
While a 401(k) retirement plan is a common retirement plan for employees, it’s not the only one available. Consider contributing to employee college savings plans or college debt payment plans. You could offer matching contributions for IRA accounts instead of only 401(k) accounts. To know what the options are, consider partnering with a financial institution.