Planning for retirement can be tricky. As the economy works its way back to full strength, employees are often faced with difficult decisions of whether to save money for their 401(k) or work toward paying off student loans and other expenses. While no company can ensure a stable future for all workers, they can take certain steps to educating employees on all of their options and how they can save for retirement if they so choose.
Steve Parrish wrote a Forbes contribution piece that explained when businesses have strong retirement planning services available to employees, it will pay off in the long-run. Workers of all ages want to know where they stand with a company, and how the organization views their contributions.
Older employees want to have a strong exit strategy, and will appreciate knowing where the light at the end of their employment tunnel is, Parrish wrote.
“A competitive retirement plan motivates younger employees as well,” he added. “They see an opportunity to grow wealth within the company rather than seeking their fortune elsewhere. The golden handcuff of a long-term savings plan may give them a reason to avoid the salary chase.”
When companies have a strong HR software solution, it can be easier for employees to keep tabs on their retirement plan savings as well. For example, Wells Fargo released research that showed there was a 28 percent increase in the number of employees taking loans from their 401(k) plan in the fourth quarter of 2012.
Of the 2 million employees surveyed, who were enrolled in company-administered defined contribution plans, 34.2 percent who took out loans were in their 50s.
By implementing HR systems, businesses are not only streamlining their own administrative work, they are helping employees create stable retirement options.