Merely offering a 401(k) plan isn’t enough in today’s competitive job market.
In a world where workplace culture, benefits and other perks are increasingly important when people consider employment, employers need to add value to their employee benefits.
Retirement Planning With Your Employees
There’s a difference between providing an employee benefit plan and retirement planning with your employees.
Providing individual, customized retirement planning is one way to add value to your employee benefits. Every employee’s financial standing is different. Are they single or married? Are they the sole provider? Are they saving for their children’s college funds? All of these factors impact the individual needs of retirement planning and the degree to which your employees save.
Providing individual financial planning for your employees starts with bringing in an advisor to sit down with each employee to evaluate a few factors. First, what is the current state of that employee’s finances? Are they on track to reach their financial goals? If not, how can this employee reconcile their present finances with the path they want to be on for retirement?
One of the most beneficial services a financial advisor can offer your employees is calculating how their 401(k) contributions impact their future retirement income. Your employees should leave their financial planning meetings understanding a number of key calculations about their finances, including:
- How their take-home pay will be impacted by retirement contributions
- The growth and development of their contributions over the next few decades
- A comparison of their future retirement income options based on various levels of contribution (i.e. how much they will have at retirement with the minimum contribution vs. how much they would have with the maximum contribution)
Bringing in an advisor to meet with your employees regularly, whether it’s monthly or quarterly, helps your employees dodge common financial mistakes, like contributing too little or not at all to a 401(k) plan. A financial advisor isn’t necessarily there to tell an employee what percentage of their pay to invest in a 401(k) plan. The advisor’s role is to map out employees’ financial goals and help employees use their retirement plan investments to meet those goals.
The Benefits Of Adding Value
Don’t fall into the trap of offering the bare minimum when it comes to employee benefits. Your employees deserve more than just a packet of information about your 401(k) plan. As an employer, plan sponsor or human resources representative, you may be hesitant to cross the lines of professional responsibility by providing your employees with access to a financial advisor. However, the value will likely outweigh your reservations.
What’s in it for them?
Employees gain the insight offered by an advisor. They have an educated view of their retirement plan and the plan’s positive impact on their future. It can be difficult to set practical, achievable financial goals for oneself, but an advisor provides the feedback and expertise that your employees may not have.
Often, employers simply hand out the 401(k) plan materials. An employee may not have time to read all of the information and weigh their saving options. An advisor has the time to both understand the plan and individual employees’ financial goals, assessing each to choose the best savings course. Your employees may even feel empowered to save more when they can see the big picture.
What’s in it for you?
Don’t view the provision of a financial advisor as an added cost for your employee benefits plan. Your employees will appreciate the investment in their financial stability and view this as an added perk to working for your organization. You may see an increase in retention when employees experience the investment you’ve made in them.
With the additional benefit of personalized financial planning, you can expect participation in your retirement plan to increase significantly. Instead of viewing commitment to the plan as an added chore of reading and financial planning, your employees will be grateful for the enhanced plan you offer.
Are you interested in adding value to the retirement plan you offer your employees? Learn more about the FutureFinancial Retirement Planning Maps that Richard Brothers offers. If you are interested in learning more after checking out that page schedule a free consultation with one of our advisors.
