Get Used to Your Boss Helping You Prepare for Retirement
Most of us need all the help we can get when it comes to retirement planning. Americans are not only poor savers, but a lack of financial education and initiative results in many adults being confused about all aspects of money. However, it may soon become virtually impossible to avoid retirement topics in the workplace.
Your boss wants you to be in better financial shape. According to a new report from Aon Hewitt, 93% of employers indicate that they are likely or moderately likely to focus on the financial well-being of their workers this year, even beyond typical retirement decisions. Half of all 250 companies representing 6 million employees in the study believe financial wellness has become more significant in the past two years. The most common feature already offered in the workplace is education on financial markets, followed by health care planning and financial planning.
Financially fit employees help improve productivity levels, while more competitive benefits help attract and retain talent. Roughly two-thirds of all respondents say they have a financial wellness strategy in place, with a majority of those having separate financial wellness and physical well-being approaches. One-quarter of all employers list financial wellness as a pillar of a broader wellness program that includes physical health.
America’s workforce is growing older by the minute. “On average, seven Americans reach age 65 every minute. This rate will continue for the next several years,” according to the report. “With this will come more retirements, and nearly three-quarters (72%) of plan sponsors believe they will experience an increase in the retirement-eligible population of their workforce over the next three years. In response, employers are ramping up their levels of communication and education to near-retirees to help them plan for the next phase of their life.”
Aside from the obvious perks of learning more about personal finance and placing more money aside for future needs, workers are benefitting from employers taking more action behind the scenes. Nearly half of all plan sponsors have recently reviewed total plan costs. Of the remaining half, more than 70% are very likely to do so in 2015. Almost one-quarter of plans have recently restructured their administrative fees so that they are assessed in a more equitable manner.
Some employers are even taking action to make sure money stays in retirement accounts. The report finds that 77% of plan sponsors feel that minimizing leakage such as 401(k) loans and withdrawals is very or moderately important. More than half are very or moderately likely to take some action in 2015, with the most popular avenue being educating individuals on how a loan impacts retirement income. Some employers are taking more direct routes, such as reducing the number of loans available, implementing a waiting period between loans, or eliminating loans altogether.
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