October 20th marks the beginning of National Save for Retirement Week. This week on the calendar is both a reminder that many employees are struggling to save adequately for retirement, and that plan sponsors bear some responsibility for changing this. With frequent reports of soon-to-be retirees discovering they lack a sufficient nest egg to retire comfortably, it’s vital that plan sponsors educate plan participants to make retirement savings a priority.
Since the inception of the nationally recognized week in 2006, companies across the country have taken advantage of this opportunity to communicate with their employees struggling to save sufficiently.
While most people are well aware of the fact that they need to contribute to a savings plan, not many are confident they’ll be able to save enough; whether it’s the result of personal financial struggles or general apathy. But as a plan sponsor, part of your mission should be to demonstrate exactly why it’s important, and how saving just a little each paycheck is better than having nothing when it’s time to retire.
Employees also need to understand the benefits of starting to save as soon as possible. Aside from having sufficient funds when they reach retirement age, they can also profit from tax incentives and employer contributions that might be available to them.
Ideas for This National Save for Retirement Week:
- The $13 Cup of Coffee – Send your employees an email with the subject line $13 Cup of Coffee. It will get their attention and prove a point. A person who is 35 years old today could expect to pay roughly $13 for a cup of Starbucks on the day they retire! Once you have their attention, provide them with the following links to retirement calculators. CNN Money Retirement Calculator or AARP Retirement Calculator. They are simple and take less than 5 minutes to complete. After answering 10 questions the participant will get a projection of how much money they will need for retirement, as well as how much money they will have, based on current contribution rates.
- Defer More, Win A Prize! – Sometimes participants just need a little push. How about having a little incentive contest? Say everyone who increases their deferral percentage in the next 2 months (or however long) will be entered in a drawing to win a prize. The bigger the prize, the better response you will get. The ultimate prize? Give the winner their extra deferral as a bonus!
- Retirement Plan Scavenger Hunt – This is one of our favorites. Give participants a list of 15 different things they need to find related to the plan. Some suggestions: A copy of their last 401(k) statement, their deferral rate, the amount of their annual contributions last year, the name of one of the plan’s foreign equity investment option, and something you know they will need to go to the website for. The point here is to get participants engaged with the plan website. Of course, the winner should get a prize!
- National Pack A Sack Lunch Day – Wednesday 23, 2013 – Did you know that you can save over $1,000 a year by packing your lunch 3 or more times per week? In the spirit of taking small steps that can really add up, encourage employees to pack a lunch on Wednesday. Don’t be afraid to offer dessert!
Remember, the more your employees know about retirement plans, the better they’ll be at making appropriate decisions regarding their plans. It’s National Save for Retirement Week, have fun with it!