Helping your employees retire successfully is not only a responsible and ethical business practice but can also contribute to employee loyalty and overall workplace satisfaction. Here are four ways to support your employees in preparing for retirement:
1. Ensure that your long-tenured employees will remain valuable to your organization.
Require your employees with 20 years of experience to attend conferences, training programs and networking events. This will help them stay current with industry trends. Remember this group in your HR programs designed to increase employee engagement.
2. Reassess your 401(k) plan.
This plan has been in existence for 30 years and has failed to equip the majority of the workforce with the ability to retire. Reconsider funding (or increasing) a (the) 401(k) match when budgeting payroll increases. Consider automatically enrolling your employees into your 401(k) plan upon hire — even if your majority wage earner is near minimum wage.
3. Consider other forms of Benefit Programs.
Most Long-Term Disability plans end at age 65. Invest in an insurance plan that will provide benefits for employees after age 65 when the likelihood of becoming too ill to continue working increases. At Achilles Group we have seen our clients struggle to honor their long-time employees when they have become too ill to work but are not financially prepared to retire by continuing their wages on the company’s payroll indefinitely. This puts a difficult burden of decision making on a company owner. An insurance plan offered only to long-tenured employees will save expense and heartache. Although the premiums may be higher for this age group, you would not be offering the benefit for your entire workforce, but only for those aged 60+.
4. Educate all employees regularly about retirement to improve your employees’ savings behavior.
When was the last time your company or 401(k) broker held an education session that actually provided helpful, simple advice to inform employees about how to invest? In the past, corporate pension plans and employees’ retirement futures were managed by a team of advisors who held the responsibility of ensuring that employees’ investments would prepare them for retirement. Although we have shifted that burden onto the employee, we have not provided them with the education they need to invest on their own. As a result employees are frequently too overwhelmed with information and procrastinate decision making. Often they will neglect to invest entirely.
Additionally, it’s essential to maintain open and transparent communication about retirement planning options and resources. Encourage employees to seek guidance early in their careers and periodically review their retirement plans as their financial situations evolve. By taking these proactive steps to help your employees retire, you can contribute to their financial security and well-being while fostering a positive and supportive workplace culture.
