Workplace retirement
Raising awareness of retirement options among staff and co-workers
Showing someone the ropes at a new job is about more than how to work the copy machine or coffee maker.
Managers and colleagues may want to talk to them about retirement as well. An astounding 3 out of 10 workers don’t know whether their employers offer retirement plans, according to a survey for the Certified Financial Planner Board of Standards.
“That was, quite frankly, shocking,” says Kevin Keller, the board’s CEO. “But it clearly shows that people just don’t know what their options are.”
1 Why you should care
This survey finding should dismay employers, because retirement benefits are supposed to help attract and retain workers. It should concern others as well. Taxpayers shoulder the burden when people hit their retirement years unprepared as impoverished seniors mean more strain on public assistance.
2 Your nudge could spur action
Sometimes the nudge doesn’t need to come from HR.
Jackie Beck was persuaded by the company match. Beck says she was “19 or 20” and worked in a newspaper’s classified advertising department when her supervisor encouraged her to sign up for the company 401(k) plan. “She pointed out that the match was basically free money, that there wasn’t a downside, and that I could stop participating at any time if I wanted to,” says Beck, now 51 and a personal finance writer in Phoenix. “Free money did the trick for me.”
3 Do as I say, not as I did
You don’t have to be a great saver to nudge others, by the way. If you wish you’d started saving earlier or saved more, you can share that sentiment while suggesting your coworkers not make the same mistake.
If you’re not saving because you don’t have a retirement account at work, know that you have plenty of company. Without a workplace plan, most people don’t save: An AARP survey found workers are 15 times more likely to put aside money for retirement if they can contribute through payroll deduction.
That’s why 10 states — California, Connecticut, Illinois, Maryland, Massachusetts, New Jersey, New York, Oregon, Vermont and Washington — are rolling out plans to give small-business employees access to simple retirement plans through payroll deduction. Many other states are considering similar legislation.
You don’t have to wait, though. You can contribute to an IRA and encourage your coworkers to do the same. Then you can start looking for a job with better benefits.
This article was provided to The Associated Press by the personal finance website NerdWallet. Want to suggest a personal finance topic that Quick Fix can address? Email apmoney@ap.org.