Keep Your Mimosas Bottomless During Retirement
5 Reasons Retirement Education is Important
How do your employees picture retirement? Are they on a beach somewhere sipping bottomless mimosas? Maybe taste testing all of the gelato in Europe? Whatever their retirement plans are, the reality is they actually have to plan for them. It’s important they’re well educated and diversified in retirement options to know what to expect before that bottomless mimosa turns into just one.
Automatic plan design features such as: auto-enrollment, auto-increase and default investment options have made strides in getting employees closer to retirement readiness. Combining those features with quality retirement plan education is important to get participants to the next step. Increasing active engagement in the retirement plan can help employees maximize their retirement savings’ potential and combat some of the financial challenges that may fall in their path.
Below are five reasons why education is an important component of retirement success:
- It can help employees navigate retirement concerns. 43% of employees report running out of money as their biggest retirement concern, with 32% stating healthcare costs are a top concern.1 Retirement plan education can help employees understand how much they might need and what they may anticipate for healthcare costs to promote better planning.
- It can empower employees to overcome current obstacles. Of those who are not currently saving for retirement, 63% cited their reason for not saving was that they have too many other expenses.2 Education can show employees how saving may fit into their current situation and even a small amount can impact the future.
- There are increased demands on retirement income. People are living longer than ever before, which means their retirement income may need to last longer. Furthermore, more active lifestyles filled with travel and hobbies place larger demands on retirement income. Educating employees on their provider’s retirement income tools can help define what they may expect to have in retirement, and how to potentially increase their retirement income if needed.
- There is uncertainty regarding Social Security. 51% of Millennials believe they’ll get no benefits from Social Security and 39% predict they’ll get benefits at reduced levels.3 Uncertainty over Social Security, particularly for younger employees who have decades before retirement, emphasizes the importance of promoting active planning sooner rather than later.
- It can help minimize the overuse of loans and withdrawals. Many employees don’t see the harm in using their retirement savings for non-retirement expenses through loan and hardship provisions. Education can help employees understand the tax and retirement implications of these actions and can encourage employees to prepare for unexpected financial circumstances without reaching into their retirement assets.
To learn more about retirement plan education and keeping those retirement dreams of bottomless mimosas on the beach, contact a member of Assurance Financial Services.
1 PricewaterhouseCoopers, “Employee Financial Wellness Survey,” 2015, page 12. 2 PricewaterhouseCoopers, “Employee Financial Wellness Survey,” 2015, page 15. 3 PewResearchCenter, “6 New Findings about Millennials,” 2014.
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Assurance Financial Services, Ltd and Assurance Agency, Ltd are not affiliated with Kestra IS or Kestra AS. Assurance Financial Services, Ltd is a wholly owned subsidiary of Assurance Agency, Ltd.
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