Live Your Best Life: Now and In Retirement

Americans are living longer than ever before. Life expectancy is now at 79 years old, and many employees will need to save enough to live 17+ years in retirement.1 How financially prepared are your employees to enter into this next stage of life?

Saving more today can make a huge difference. Share this questionnaire with your employees so they can picture their retirement lifestyle and determine if they should be saving more today to live the future they desire.

Download the Questionnaire

 

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.

©401(k) Marketing, LLC. All rights reserved. Proprietary and confidential. Do not copy or distribute outside original intent.

You Can’t Talk About That at Work: Tackling Financial FAQs

Talking about money is tricky, especially at work. While it may seem too personal for work and easier to avoid the conversation, the effects can have a lasting effect on a company.

 

More and more forward-thinking employers are starting to overcome the stigma that surrounds talking finances at work. They are putting to rest their fear of overstepping boundaries because employees strongly value financial guidance at work. In fact, 87% of employees want help and nearly 9 out of 10 take advantage of financial wellness services when offered.[1]

Stress Impacting the Bottom Line

It is well documented that financial stress can cause a myriad of workplace complications. Stress can have a cascading effect; for example, 4 in 10 employees experience health issues or loss of sleep due to financial stress, which in turn leads to a $400 annual increase in healthcare costs per stressed employee.[2]

Stress also has a way of consuming productivity; 3 in 10 employees admit that financial stress has impacted their job performance, and they spend three to four hours a week at work dealing with their finances.[3]  That’s 150 hours of lost productivity per stressed employee per year.  That’s a lot!

The Elephant in the Room

When companies are up against a complex problem like financial stress, how do they start attacking the problem? Well, like the saying goes, you have to eat the elephant one bite at a time, so financial guidance and education can be great ways to start combating the 5,000-pound problem.

One of the most important areas of concern for employees is retirement readiness, so employers need to emphasize communication around the topic.

Good employee communication is a must, especially letting them know there is no such thing as a “stupid” question. Emphasize that they shouldn’t be hesitant or embarrassed to ask the questions on their minds. Here are some questions employees might ask about saving, investing and planning for retirement.

Tackling Employee FAQs

Why save? First, to help you in the event of an emergency or for large-ticket items such as a house or car. It is also very important to save for retirement if your goal is to be financially secure when you’re no longer working. You don’t want to depend on Social Security for your total retirement income.

When should I start saving for retirement? Now. The sooner the better. It’s easy to see retirement as something in the future and not an important event you need to start preparing for at an early age. Additionally, if you don’t know how to start, what to invest in or understand the power of compound interest, you might feel like putting it off. Ask your 401(k) administrator if you don’t understand your plan.

What’s compound interest? Compound interest is interest paid not only on the money you’ve invested, but on the interest you’ve already earned. Because of compound interest, even small amounts become larger over time.

What’s an investment? An investment is a way of putting money aside so you can get a return on it. Investments are often thought of in terms of stocks and bonds. Your 401(k) plan has investments to put your contributions into, so take advantage of them.

What’s a stock? A stock is an investment that represents partial ownership of a company. Units of stock are called “shares”, which may pay interest and dividends to you as an owner. They’re traded on the stock market, where the price can fluctuate up and down.

What’s a bond? A bond is an investment where you lend money to a company (or a government); the borrower then pays interest until the bond matures at which time you should receive your money back.

Your 401(k) plan may have a variety of investments such as mutual funds, a type of investment in which many investors pool their money in securities like stocks, bonds, and money market instruments. It might also contain Target Date Funds, a type of investment, often consisting of mutual funds, structured to grow over a specific time frame and then become more conservative once that target date, usually at retirement, is reached. Like stocks, the value of mutual funds and target date funds can fluctuate.

Teamwork Makes the Dream Work

Speaking with a financial advisor or joining a financial wellness education session can engage and assist employees in being more financially responsible, take better advantage of their 401(k) plan and be more “present” at work.

After all, 82% of employers subscribe to the belief that it is in their company’s best interest to help employees become more financially secure. And employees tend to agree: when employers demonstrate a commitment to their financial wellness, 60% of workers say they are more dedicated, loyal and productive at work.[4] It’s a win-win situation for all!

Contact us to discuss common employees FAQs and ideas to reduce workplace financial stress that can elevate savings.

 

 

Toll Free: (866) 364-6262 | Fax: (703) 878-9051

 

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Office: (703) 878-9050

 

RESTON OFFICE

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Reston, VA 20190

Office: (703) 904-4388

Alliant Wealth Advisors offers this blog to provide valuable insights to retirement plan sponsors.  For more than a decade, we have helped employers from diverse business sectors offer their employees a better retirement plan.  We guide sponsors in all plan areas, tailoring our service to each company’s unique needs.

Laurie Wieder, Vice President – Institutional Retirement Plan Specialist at Alliant Wealth Advisors, is available to discuss your thoughts about the content of this blog . . . or any other 401(k) plan issue. Laurie backs her expertise as a retirement plan specialist with more than 30 years of experience as a consultant, business owner and organization executive.

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.

©401(k) Marketing, LLC. All rights reserved. Proprietary and confidential. Do not copy or distribute outside original intent.

[1] PwC. “PwC’s 10th Annual Employee Financial Wellness Survey.” 2021.

[2] Prudential. “Wellness Programs Earn Their Place in Human Capital Strategy.” June 2019.

[3] Prudential. “Wellness Programs Earn Their Place in Human Capital Strategy.” June 2019.

[4] Prudential. “Wellness Programs Earn Their Place in Human Capital Strategy.” June 2019.

Seizing Opportunity with an Annual Plan Review!

July 5, 2019 – Today’s 401(k) plans offer employers a world of options. A mid-year plan review positions sponsors to identify areas where improvements are possible. Adopting new plan design features can significantly improve a 401(k) plan to meet organization needs and help employees build toward a secure financial future. Since many plan design changes require notice to participants 30 days before the beginning of a new plan year, now is a good time to schedule a review of plans with a December 31 year-end date.

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When Ignorance Isn’t Bliss!

February 7, 2019—Plan sponsors: Do you know whether your organization’s 401(k) is as good as it could be?

  • Does it include the best possible funds, and are your employees offered professional investment management to help them meet their retirement goals?
  • Is your plan designed with the features that make 401(k) plans most valuable both to employees and organizations?
  • Have you taken advantage of ERISA safe harbors to reduce your fiduciary risk?
  • Is your plan easy to administer and do you understand ERISA’s regulations?
  • Are you aware all plan fees and know they are reasonable?

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2018 isn’t over until the data’s scrubbed!

Retirement sponsors know it: while others are ringing in the new year, January is a time for 401(k) plan administrators to assemble, scrutinize and validate prior-year data for plans with a December 31 year-end date. Diligent information scrubbing is important. “Clean” data will result in accurate testing and tax filing. A lack of attention to detail can result in tax-filing errors, the need for voluntary corrections, regulatory audits, and – worst-case – plan repayments, fines and penalties.

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Getting Noticed . . . A Guide to Enrollment Notices for New 401(k) Participants

December 6, 2018 – There are good times and bad times to be noticed.  Most 401(k) plan sponsors don’t want to be noticed (and then investigated) by the U.S. Department of Labor.But employers need to provide notices to employees as they become eligible to join a 401(k) plan . . . or face potential employee complaints and DOL investigation.

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Have You Noticed? A Guide to Year-End (and other) 401(k) Disclosures

November 1, 2018 — It’s an important time of year for most 401(k) plan sponsors: the time to give notice . . . to participants . . . as required by the U.S. Department of Labor. When I say “most,” I’m talking about the sponsors of plans with a December 31 year-end. (For other sponsors, file this blog and revisit it two months prior to your plan’s year-end.)

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Continuing the Conversation: Company Benefits when 401(k) Plan Includes Financial Education

July 5, 2018—Have you started the conversation at your company to determine how to get the biggest organization benefit from your company’s 401(k) plan?

In last month’s Starting the Conversation blog I shared some facts to get company leadership talking. There’s a heavy organization cost when employees can’t retire at normal retirement age and an even greater burden when employees lack the solid financial foundation that allows them to build toward retirement.

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