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

 

MANASSAS OFFICE

9161 Liberia Avenue

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Office: (703) 878-9050

 

RESTON OFFICE

11921 Freedom Drive

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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.

Q4 Newsletter: Strategic Thinking Edition

As we begin to say goodbye to 2021, let’s look forward to the new year by addressing employee financial habits after COVID, how a K-shape economy is impacting your workplace and how your retirement plan committee plays an important role in helping employees pursue retirement plan goals.

Explore these topics and their implications for employers in helping employees save in the Q4 Newsletter – Strategic Thinking for Plan Sponsors.

Plan Sponsor Newsletter: Strategic Thinking

 

 

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.

Are You Among the 38%?

December 7, 2017—A record number of 401(k) and 403(b) plan sponsors – 38% – are actively seeking new plan advisors, according to a recent Fidelity Investments survey. That’s not a surprise given changes in the retirement plan industry. Among other things, the Department of Labor’s new Fiduciary Rule requires employers to confirm their advisors are acting as fiduciaries and in the best interests of their clients. Advisors who are unprepared have caused some employers to interview other advisors.

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QDIAs…A Recipe for Fiduciary Protection (and a Better Retirement Plan)

August 2, 2017—A Qualified Default Investment Alternative – more commonly known as a QDIA – is a provision available to 401(k) and 403(b) plans that reduces the potential personal liability of plan fiduciaries while improving the ability of participants to build toward retirement. For many employers whose plan doesn’t currently have a QDIA, only a few steps are required to take advantage of its benefits.

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Are You Ready? Simplifying Tasks and Reducing Risk Under the Fiduciary Rule

July 5, 2017—The Department of Labor’s Fiduciary Rule, which changes the 401(k) and 403(b) investment management landscape for both plan sponsors and advisors, took effect June 9th. Are you ready? As a plan sponsor fiduciary, your responsibility – and potential liability – just increased!

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The Doctor is “In”…With a Prescription for Managed Accounts

June 1, 2017—In previous blogs, we discussed how Target Date Funds can be confusing for retirement plan sponsor and participant alike. Such uncertainty can result in serious consequences: an increase in potential liability for plan sponsor fiduciaries and missed retirement income goals for participants. Now we turn to a superior investment solution for 401(k) and 403(b) plans: managed accounts.

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Target Date Funds, Part 2: Participants Lost in Space?

May 9, 2017—Target-Date Funds can be a poor investment “shuttle” for plan participants, as eventually discovered by many employers who act as “Mission Control” for their corporate retirement plans. In meetings with 401(k) and 403(b) plan sponsors, I frequently learn that these employers believe they have successfully launched employees on a flight path toward retirement success by offering a Target Date Fund series in their plan. Unfortunately, plan participants invested in a Target Date Fund can find themselves financially “lost in space” when they retire, due to common misperceptions regarding TDFs, as well as the funds’ complex and often confusing nature. This backfires on the high hopes of employers to assist their employees in preparing for their financial futures.

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