By Jenny Sherman, SPHR CCP, Director of HR Services, Trupp HR.
Retirement Savings Myths
In a recent article, Four Retirement Savings Myths, by The Partners Group, an insurance and retirement provider serving individuals and employers in the Portland, OR and Seattle, WA regions, the author identified the following myths associated with retirement investment:
- I can postpone saving now and make it up later
- A retirement target date fund puts me on investment autopilot
- I should invest primarily in bonds rather than stocks as I get older
- I will need much less income in retirement.
Financial Stability Contributes to Employee Well Being
Successful businesses realize that helping employees to achieve positive well-being boosts productivity, ultimately increasing business results. Gaining stability in personal finances is one of the cornerstones of well-being. In 2011 Vanguard conducted a study of 401(k) plan participants to learn more about the average participant. The study revealed that:
- On average employees contribute 7.1% of pay to retirement savings
- The average total account balance was $78,276
- The annual contribution, including both employer and employee deposits, was $7,854
- Participants select 3.2 investment options on average
- About 24% of eligible employees were not participating
According to their research, employees should be saving at least 10.49% of their pay (including employer and employee deposits), although 12-15% savings rate will get them closer to what most people need or want.
Providing retirement benefits and resources to assist employees with planning contributions can help them toward achieving their retirement goals. It is important as an employer to emphasize to your staff that when it comes to saving for retirement, now’s the time!
Offering a Retirement Plan Increases Competitive Advantage
An employer retirement savings plan is a strong recruitment and retention benefit. If you don’t have one in place, you could be at risk of losing your top talent and compromising your competitive advantage with new recruits. Today’s the day. Trupp HR offers a suite of services associated with benefits selection, implementation and administration. We can help connect businesses with the right vendors, using best-practice design, and coordinating the details to establish and launch retirement and other important benefits for employees.