Every year a new retirement study is released, and every year the highlights are the same. People are not saving enough for retirement, and the older people get the more stressed they become about being able to afford to retire. Businesses have a unique opportunity to help reverse this decades-long trend. You can help encourage your employees, even the youngest ones, to save more for their retirement. By investing in the financial education of your employees, you will also be helping your own bottom line.
How Employee Retirement Savings Help Employers
You want to do the right thing for your people. That’s one of the reasons you offer a retirement plan. But helping your employees save more towards retirement also helps improve your business. Research shows that employees are happier, more productive, and more loyal when they feel like their employer cares about them. When you encourage your employees to save for retirement, you are demonstrating that you care about their futures, even after they have left the company. The research also shows that as we get older, we begin to stress more about our retirement savings. Stress lowers our effectiveness. Financial worries can increase our cognitive load. Often, employees have a constant low-grade fear that they don’t have enough retirement savings. This makes them less effective at their jobs. When you encourage employees to better manage their retirement savings, you help reduce the stress that these employees would otherwise feel down the road.
Create a Focus on the Future
One of the best ways to encourage employees to save more for retirement is to help them focus on their future. Studies indicate that if we can view our future selves as a different person from our present self, we will make better long-term decisions. This includes saving more for retirement.
Provide Financial Education
Financial literacy is not taught in schools at any level in any meaningful way. But, financial literacy is a strong deciding factor between people who start saving for retirement at an early age and those that don’t. Provide your employees with financial education resources. This could include having guest lectures at lunch, distributing physical financial literacy materials, or providing links to online financial resources. Talk to an OmniStar Advisor today about our Qualified Retirement Plans, and how we can help you help your employees.
Use Multiple Channels and Methods
We are all busy. Even when we want to take action on an idea, it often takes multiple exposures to a message before we are motivated enough to do what we know we should do. You can increase the retirement savings rate by engaging with your employees across multiple channels. This could include emails, posters, social media, and live events. People also learn differently. By pushing the same message in different formats and channels, you increase the chances of your employees taking action.
For many employees, retirement accounts are scary and mysterious. They don’t understand how their 401(k) accounts work. You should make it easy for them to ask questions and get help with their retirement accounts. People won’t increase their savings if they feel it’s too complicated to make changes to their contributions or withholdings. Make sure you teach your employees who they can go to for questions with their retirement plans. Part of being a great employer is helping employees make the best decisions for their future, even when they aren’t sure why it matters.