General financial education, in addition to education specific to 401(k) plans, can encourage employees to save more for retirement. Topics like budgeting, debt management and reduction, and finding ways to save on household purchases may allow employees to feel more confidence in contributing more of their income to the plan. In turn, that can lead to improved retirement readiness.
It’s wise to consider employee interests when selecting topics, because there is some disconnect between what employers think is important for employees to know, and what employees really want to know. For example, 81% of employees want more education about how to obtain life insurance, but only 68% of employers thought they would. Forty-seven percent of employees want to know about saving for children’s education, compared to 24% of plan sponsors. And refinancing or paying off student debt is on the minds of 46% of employees, but just 18% of employers said it was important.
You might consider an employee survey to identify the financial topics that are truly on the minds of your employees. That way, you may get greater participation in the sessions — as well as in the 401(k) plan. Read more in the Alight 2018 Hot Topics in Retirement and Financial Wellbeing report, here: https://tinyurl.com/Alight2018HotTopics.
Tags: 401k plan, budgeting, financial education, income, life insurance, retirement, saving