Planning for a happy, financially-secure retirement is a decades-long process. Most people will spend the majority of their working career planning for their post-work life and taking advantage of workplace retirement tools can be an excellent part of that plan. Demonstrating a commitment to your employees’ long-term financial and life goals not only allows them to focus on the work they’re doing today, but can also help with your other business goals like retention and recruitment. Here are just a few of the retirement resolutions that you can help your employees keep this year.
Know your goals
Every solid retirement plan is built on a basic understanding of what kind of retirement you want. What does your ideal retirement look like and how much will it cost?
Your retirement plan administrator should be able to work with your employees to help them determine their long-term retirement goals and offer advice on the best way to achieve those goals. By helping employees get and stay on the right spending and savings track, your retirement plan administrator can help your employees achieve a happier and healthier retirement. To learn more about planning for retirement, check out ABCs of Retirement.
Think realistically about Social Security
For decades, Social Security benefits have been the bedrock upon which most workers’ retirements have been built. Retirement has started to look less and less traditional, with people continuing to work part-time, relocating to a foreign country, or traveling extensively. As a result, Social Security benefits may need to be optimized to ensure that they can keep up with their retirement expectations.
For many workers, maximizing their Social Security means thinking long and hard about when they want to begin drawing on these benefits. Generally, the longer you wait to begin drawing on your Social Security benefits, the higher your retirement paychecks will be. Your retirement plan administrator can help you estimate your Social Security income based on specific start dates, helping you determine the best claim strategy to meet your retirement goals. Read Common Retirement Concerns Every Employee Has for more tips to help you prepare for retirement.
Maximize whenever possible
As the most popular work-based retirement accounts, 401(k)s offer employees the opportunity to save money for their retirement pre-tax – reducing their current tax liability while helping them save for their golden years. By maximizing their contributions and taking advantage of employee matching programs, your employer-sponsored 401(k) could be the best tool that your employees have in their retirement toolbox.
For 2020, the IRS has increased the contribution limit for employees who participate in 401(k) plans to $19,500. Employees over the age of 50 can make additional catch-up contributions to their 401(k) of $6,500 per year. Ensuring that you are making the highest possible contribution to your 401(k) now will not only help set you up for a better retirement future, but can also help you save money each year at tax time by lowering your tax liability.
Additionally, your retirement plan administrator should make sure that every employee understands the company’s matching policy. While not all company’s offer these programs, many employers opt to match their employees’ retirement account contributions up to a certain limit. Helping workers take full advantage of these types of benefits can help ensure that your employees are meeting their retirement planning goals. Check out Help Your Employees Prepare for Retirement to learn more about 401(k)s and other retirement tools.
Think health with an HSA
As we age, the cost of staying healthy increases, so it’s no surprise that healthcare costs are one of the greatest concerns for employees nearing retirement. While health savings accounts (HSAs) may seem like something that younger employees should be concerned about, these valuable savings vehicles can also serve as a life raft for workers nearing retirement.
HSAs offer a triple tax advantage. Contributions are tax-deductible, the money in the account grows tax-deferred, and as long as you use it for qualified health care expenses, you can spend your HSA funds tax-free. While many workers use their HSA to cover more immediate out-of-pocket medical costs, HSAs offer an opportunity for older workers to offset future health expenses once they retire. By setting aside money during their careers, workers are better able to handle surprise medical expenses during retirement. Check out HSA Catch-Up Contribution FAQ to learn more about the link between HSAs and a happier retirement.
Help employees get and stay financially fit
For most employees, their retirement success depends a lot on their current financial success and fitness. Financial wellness programs can help employees understand their goals, the steps they need to get there, and identify action items to help them build the financial security they want. By encouraging employees to stay financially fit throughout their working career, you’re helping them better prepare for their post-work life. Check out Benefits on the Rise: Financial Wellness Programs to learn more about how these programs can benefit both your employees and your business.
Plan administration you can trust
Selecting the right retirement plan for your company and employees can be a daunting task for many small and mid-size employers – that’s where we come in. Sheakley Retirement provides individual retirement account support for small to medium-size employers. It starts with a consultative meeting to determine the plan design that best meets the needs of the business and its employees. Then we’ll manage the retirement planning services, ensuring a simple, efficient and successful 401(k) profit-sharing plan or other retirement programs.
Learn more about Sheakley Retirement and contact us for your free consultation today. Stay up-to-date on all things Sheakley by subscribing to our blog and following us on social media. Join the discussion by commenting below.