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Are Your Employees Ready for Retirement?-1Retirement readiness is a source of increasing stress for many Americans, particularly for members of Generation X, who are becoming the veterans of the workforce. Recent research by the Employee Benefits Research Institute (EBRI) highlighted one subset of the “retirement deficit” — how the average Generation X retiree who is single or widowed will have far less money than she will need to meet her basic needs.

One of the most important ways to reduce this shortfall, according to the EBRI research, is to have access to a defined contribution (DC) plan, like a 401(k). And health savings accounts (HSAs) are another valuable tool, especially when it comes to saving tax-free for post-retirement medical expenses.

Here are some ideas to help you ensure that your employees not only have access to retirement plans and long-term benefits, but also are contributing to them and mapping a path to a comfortable retirement.

HSAs Offer Long-Term Potential

There are many pros and cons to HSAs. When paired with high-deductible health plans, HSAs allow employees to save and ultimately use tax-free money for qualified health care expenses. What is less widely known, however, is that HSAs have long-term potential when it comes to getting ready for retirement. With HSAs, unlike flexible spending accounts, thousands of dollars can be saved — with a chance for the money to grow tax-free over time.

Employers that offer this benefit can educate employees on HSAs’ potential as a savings vehicle that can help take care of future health care expenses.

Focusing on health care benefits, as a whole, is a great strategy for employers looking to support their employees in preparing for retirement. Access to health benefits is a primary reason some aging employees stay on the job. Make sure your employees know their health care options, including HSAs, whether they’re retiring before or after they turn 65, and the impact these options will have on their post-retirement incomes.

Provide Access to Retirement Advisers

In a world where DC plans have replaced almost all defined benefit plans (pensions) for private-sector workers, the investment and financial risks now fall on employees. Bringing in independent advisers to help your employees with their investment decisions for their unique situations can help them make more educated decisions when it comes to their long-term financial strategy. For example, advisers can guide them in determining how much to save from every paycheck and how to adjust their strategy as they age.

Offer Broad Investment Options, and Communicate About Them

There are many different investment options related to retirement, including age-defined plans, lower-fee indexes and higher-risk, higher-reward funds that might appeal to certain employees. Options such as auto-enrollment and escalation also might encourage more employees to start saving.

Whatever options are available, it’s important to make employees aware of them through strong communication. According to recent research, employees who have flexibility in their benefits are far more likely to believe that their benefits meet their needs.

Offer Financial Wellness Benefits

Financial wellness benefits can help your employees get a handle on their current situation — and ultimately help them kick-start their long-term planning. For example, offering savings incentives, matching programs and student-loan repayment assistance can help your employees feel more at ease about their future and like they’re able to start thinking long term again.

Today’s employees need support when it comes to saving for retirement. Providing options and support can help alleviate the financial stress many employees are feeling, with positive results all around.


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