According to the Employee Benefit Research Institute's 2023 Retirement Confidence Survey of 2,357 Americans, workers’ and retirees’ confidence that they’ll have enough savings to comfortably support themselves through retirement has dropped to levels not seen since the 2008 global financial crisis. The findings show 64% of workers feel “at least somewhat confident,” with only 18% feeling “very confident” as they remain concerned about inflation and the possibility of recession. Employers can deploy a number of strategies to help.
Support financial literacy. Offer seminars, webinars and educational content on retirement planning, emergency savings and long-term care. Workers may lack confidence in these areas either because they don’t know how to put a financial plan in place or lack the skills to implement one. Plan sponsors can provide education about Social Security benefits, budgeting, debt management, tax planning and leveraging HSAs as a retirement planning vehicle.
Increase employer match. Consider increasing your match or adjusting your match formula to incentivize employees to contribute more to their retirement plan. You could increase the match percentage or the cap. They may well find that with a little extra employer assistance, their financial goals suddenly feel more within reach.
Add auto features. Implement auto-enrollment and auto-escalation to boost participation and contribution rates. These relatively straightforward and hassle-free mechanisms not only simplify retirement saving, but also demonstrate an employer's commitment to their employees' long-term financial security.
Encourage catch-up contributions. Older workers may feel more anxiety about a looming, underfunded retirement. Remind and encourage employees over age 50 to take advantage of the IRS catch-up contribution provision, allowing them to save more as they approach retirement.
Offer one-on-one financial consultations. There can be a great deal of unwarranted shame regarding money missteps, excessive debt or a lack of retirement preparedness. And this can sometimes inhibit employees from seeking assistance by means of group workshops. Encourage participants to meet one-on-one with a financial advisor who can offer personalized advice and guidance based on their specific circumstances.
Provide holistic support. If employees experience financial stress in addition to a crisis of confidence, it may be affecting their mental and physical health. Educate employees about assistance and support available to them, whether through an EAP, wellness programs or their employer-sponsored health plan.
Financial Health — and Hope
Given the many monetary stressors facing workers today, organizations need to help workers achieve greater financial health and equip them with tools to bolster confidence that they can achieve a secure financial future. With the right approach, employers can instill hope that no matter where employees are on their financial wellness journey, support is available to help them improve their chance for a secure retirement.
Sources:Contact the RPAG Support Team, support@rpag.com, to learn more about RPAG, get help with our Platform, or anything else!