The best companies show that they care about their employees now and in the future. They are able to offer competitive salaries above the living wage so their employees can live well now. Moreover, companies can take care of their employees in the future by encouraging them to save for retirement. As a human resource professional, there are many ways to help employees planning for retirement. In this post, we will cover the various methods that businesses make planning for retirement easier for their employees.
Start Talking About Retirement
Firstly, businesses should educate their employees about saving for retirement early. If you are planning for retirement early on, you will be able to save money and have it compounded over a longer period of time. This is critical information for every employee to understand. HR professionals should communicate the importance of getting started with retirement planning as early as possible. Employees who can afford to start saving should start saving right away to leverage the benefits of planning for retirement early.
Explain The Costs of Retirement
Next, HR can explain the costs of retirement so that employees understand how much they should be planning for. While costs are continuously rising, at the moment, it can cost over $250,000 in health care costs alone during retirement. This can encourage employees to eat healthy and start saving. If people are going to save up enough money to live comfortably, and take care of their health, they need to understand the costs so they can set goals. Furthermore, employees will work harder to earn more at the business when the HR department explains the costs associated with retirement.
Share The Downfall of Social Security
Human resources has the opportunity to share information about relying on social security. Many employees have the false notion that they can get social security to help live in retirement. However, there are major drawbacks to taking social security early on. If born after 1960, employees could reduce their social security benefits by as much as 30%. If they wait, they could stop losing money by planning ahead. Furthermore, with the costs of healthcare and living rising faster than the increase in social security, it would be wise to start planning for retirement right away. HR can play a vital role in communicating the downfall of relying solely on social security for retirement.
Make Contributions To Employee Retirement
In addition to offering knowledge, HR professionals can advocate for employee retirement contributions. Usually, businesses that provide matching contributions or profit sharing to 401K plans encourage their employees to plan for retirement. Instead of paying out bonuses or contributions in paychecks, the business can contribute directly to the investment savings account. You can justify this to management as a cost effective way to retain top talent in the company and take care of employees for the long term.
Automate Employee Retirement Contributions
When employees are planning for retirement, make it as easy as possible for them to stick to the plan. You can setup HR processes that automatically deduct payroll payments to the employee’s retirement account. There are many Quickbooks payroll alternatives that can accomplish this automation. Additionally, you can plan automated increases in deductions over time. This would help employees to contribute to their retirement consistently over time. These types of payroll processes are highly effective to encourage employees who are planning for retirement.
Human resources can play a critical role to help employees planning for retirement. You should have your employees learn about the power of saving and compounding interest. Then, educate them about the costs of healthcare and how relying on social security isn’t the best option. Moreover, HR can make a huge impact by advocating for retirement account matching programs and contributions. Once the retirement planning is in place, make the process as easy as possible by automating deductions and future increases. These steps will help employees plan for retirement early on, securing their future after they work long term for the company.