Touting retirement plan options tailored to employees’ needs is key

As a journalist who is passionate about financial matters, I believe it is crucial for employers to prioritize retirement plan options that are tailored to the needs of their employees. With five generations currently making up the workforce, ensuring that employees at all stages of their careers are equipped for retirement can be a significant challenge. However, by offering retirement plans that are specifically designed to meet their needs, employers can not only attract and retain top talent but also empower their employees to have a desirable quality of life during their retirement years.

Innovation in the retirement industry

The question of whether today’s retirement system is broken has been an ongoing debate among experts. While there are valid arguments on both sides, I believe that the retirement system, as a whole, is effective. However, there are areas that need to be addressed, and regulations such as SECURE 2.0 are actively working towards resolving them. The real issue lies in the lack of engagement when it comes to discussing retirement, a topic that requires delayed gratification in a world dominated by immediate desires.

Regardless of how prepared individuals are for retirement, the fact remains that millions of Americans need financial advice. This need for guidance has become a driving force behind the innovations we see in the retirement services industry today. These advancements are centered around meeting the demands of today’s consumers and helping them feel more confident about their financial future.

Over the past decades, retirement savings vehicles have transformed significantly. Older generations may recall pensions as a common form of retirement plan, while younger workers are more familiar with the 401(k) structure. While the shift to defined contribution plans places the savings responsibility on the employee, employers have a duty to assist their employees in adequately preparing for retirement. This includes designing retirement plans that meet their needs, monitoring investments as fiduciaries, and providing access to the latest tools and resources available in the industry.

Employers as the epicenter

Employees are increasingly turning to their employers for financial advice and access to resources. While they may not seek advice directly from their employer, they rely on workplace solutions to provide them with quality resources and guidance. HR professionals play a crucial role in ensuring that these programs reach employees effectively and have the intended impact on retirement preparedness. The most successful plans we have observed are those where HR professionals are highly engaged in the topic and make it their personal mission to provide their employees with the best resources available.

A study conducted by Informa/Wealthmanagement.com found that customization and personalization are emerging demands in the financial services industry. This shift is likely a result of consumers’ experiences in other industries, such as retail, where personalized experiences are the norm. Clients are also seeking more holistic advice that extends beyond their 401(k) plans, including guidance on assets held at other institutions, real estate, life insurance, and even cash savings. Technological advancements have made it easier than ever to meet these customization and holistic advice demands, and employers can gain a competitive edge in attracting top talent by offering these benefits through their workplace offerings.

The power of advice

For HR professionals, helping employees feel secure in their financial future is an invaluable tool. Beyond the basic 401(k) plan, employee financial wellness programs are starting to address the demand for customization, personalization, and more. While some programs focus solely on education, others offer sophisticated advice on in-plan assets. However, many of these programs fall short when it comes to managing employees’ financial assets outside of their retirement plans. Individuals, regardless of their savings, often feel that they don’t have enough to justify working with a financial advisor.

To address this concern and meet employees’ holistic advice needs, employers and HR professionals are turning to programs like Marsh McLennan Agency’s recently launched MMA IRA platform. This low-cost, provider-agnostic individual retirement account (IRA) solution allows employees to consolidate their outside assets and former 401(k) balances into one account, providing them with comprehensive advice and support for all their financial needs.

Related Facts

• In 2019, the average retirement savings for Americans aged 55-64 was only $126,000, far below what experts recommend for a comfortable retirement.
• According to a survey by the Employee Benefit Research Institute, only 40% of workers feel confident in their ability to retire comfortably.

Key Takeaway

Employers have a responsibility to provide retirement plan options that are tailored to the needs of their employees. By offering personalized and comprehensive solutions, employers can attract and retain top talent while empowering their employees to achieve a desirable quality of life during their retirement years.

Conclusion

Touting retirement plan options that are tailored to employees’ needs is a key strategy for employers in today’s workforce. With multiple generations at different stages of their careers, ensuring retirement preparedness can be challenging. However, by actively engaging employees in their financial future and offering comprehensive retirement solutions, employers can create a workplace that values and supports the long-term financial well-being of their employees.