Resolve to Make Retirement Easier (for Your Employees)by Charles Pareigis (April 6, 2018)
Eat healthier. Travel more. Spend more time with friends and family.
While you can’t force your employees to prepare for the future, you have the power to make it more lucrative for them to do so.
- Consider upping your match. Even if it’s as little as 0.10% or 0.25%, that’s less taxable income for your employees they can (theoretically) set aside more for retirement and gain more from compound interest. Plus, it technically counts as a raise. Getting paid more – now or in the future – is certainly an easy way to maintain top performers.
- Do an audit of your retirement planning administration costs. These fees should be minimized with no impact to the overall offering of the plan itself. Admittedly, this doesn’t impact your employees directly, but investigating this could allow you to invest more capital into other areas that will.
- Similarly, investigate provider fees for retirement funds. Some funds have higher expense ratios. While this isn’t something your employees will feel now, those extra fractions of a percent or more could add up to thousands of dollars over the life of the investment. This is especially recommended if your company can’t afford to increase the match, as you’ll still be contributing more to their retirement fund, albeit in a roundabout way.
- Offer Roth IRAs – or 401(k)s. While most employees don’t invest the maximum $18,500 to their 401(k), those who can invest at least the company match. Consider including Roth or traditional IRAs to your retirement packages. Not everyone will participate, but you’ll at least be offering a tax-free vehicle for your employees’ money to grow.
- Consider HSAs. If your company offers high-deductible health insurance policies, make health savings accounts (HSAs) available. Not only are contributions to this type of account tax-deductible, investments can be made with them. It’s common for people to use these as a replacement (or additional) retirement account.
- Don’t chase the market. It’s important to stay calm when planning for retirement. Don’t chase the market’s highs, instead, consider investing when the market is low so you can reap the rewards when it reaches its peak. And, as always, consult a financial advisor to ensure you’re choosing the right options for you.
The most important thing with this list is to pick something that’s realistic. Focus on one or two things you feel confident in pursuing, and see it through to the end.
And if you need some extra guidance or encouragement along the way, we’re here to help.