According to a survey by Bank of America, 85 percent of employees report they are not saving enough for retirement. Additionally, 65 percent ranked themselves as being “not financially well,” which has a direct impact on their commitment to saving for retirement.  

Birds of a Feather: 4 Employee Approaches to Retirement Planning

According to a survey by Bank of America, 85 percent of employees report they are not saving enough for retirement. Additionally, 65 percent ranked themselves as being “not financially well,” which has a direct impact on their commitment to saving for retirement.

Nearly every employee understands the importance of saving for retirement but few actually put this knowledge into action. This paradox has left many companies searching for the magic ingredient to engage employees in retirement planning. The secret can be found in the answer to one simple question:

What’s in it for me?

By focusing on how each employee would answer this question, organizations can effectively make an impact on retirement apathy.

“Everyone loves to fantasize about retiring, but there is often a disconnect between this dream and the reality of their current investment habits. Employers can play a vital role in helping to bridge this gap by offering retirement counsel, insight and resources that position retirement planning as a priority for today’s employee,” said Melanie Hardie, financial counselor and planner at Ceridian LifeWorks.

Increasing Retirement Engagement – A Bird’s Eye View

How can you customize your retirement program to fit the individual needs and attitudes of your employees? The chart below highlights four main employee views of retirement and ways you can best cater to these unique perspectives.

 

Ostrich Photo  Hummingbird Photo Hawk Photo Owl

The Ostrich

When it comes to retirement, the “ostrich employee” buries his/her head in the sand and puts off planning for this big event.

 

The most effective way to engage these individuals is through automatic enrollment and automatic contribution increases.

 

According to Bank of America’s Workplace Benefits Report, this approach helps employees take the vital first step of saving for retirement by requiring them to opt-out rather than opting into the process.

The Hummingbird

Employees in the hummingbird category understand the importance of saving for retirement but frequently flutter from one investment plan to the next.

 

Help ease this financial anxiety by providing retirement resources, online programs, advice and tools that help workers be more savvy retirement savers.

 

Specifically, more than 50 percent of employees state they are seeking one-on-one financial advice, according to the Workplace Benefits survey conducted by Bank of America.

The Hawk

The phrase to “watch like a hawk” describes the retirement mentality of this frugal group of employees.

 

Workers in this category closely monitor their spending and may have difficulty saving for the future due to the magnitude of their current expenses.

 

Employers can assist this group by emphasizing the “hidden paycheck” available to them through the company’s contribution match program.

 

It’s also important to highlight how retirement funds grow over the years.

The Owl

The“wise owls” of your organization are employees who are savvy financial learners actively saving for retirement.

 

Forbes encourages companies to support this group by offering higher level and more sophisticated investment options, including pre-tax and post-tax features and expanded investment options.

 

These employees may also be ideal mentors for employees at your organization who lack a retirement investment plan.

 

The growing complexity of today’s financial world is leaving many employees unprepared for their retirement. According to Bank of America, employees are in the best position to take the lead on this issue by providing more education and helping employees improve their financial wellness. After all, a financially healthy workforce is likely to be more engaged and productive.

For more information:

  • Learn about planning for a successful retirement with resources from Ceridian LifeWorks
  • Read Ceridian’s Sandwich Generation eBook
  • View Ceridian’s DNA of an Engaged Employee Infographic