Employee Financial Wellness
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Help Employees Avoid Early 401(k) Withdrawal Penalties
As an employer, you'll need to explain the risks of early 401(k) withdrawals to your ...
Help Employees Avoid Early 401(k) Withdrawal Penalties As an employer, you'll need to explain the risks of early 401(k) withdrawals to your employees. Here’s a guide with answers to common withdrawal questions. In an ideal world, employees would diligently save through their 401(k) plan and only withdraw their money in retirement. In reality, financial needs—like paying for college or buying a new home—may tempt employees to raid their retirement savings. As an employer, you can clearly explain the risks of early withdrawals so your employees can make educated decisions about their future. Here’s a quick guide with answers to frequently asked questions about 401(k) withdrawals. Frequently Asked Questions Can I withdraw money from my 401(k) plan before retirement? If you’re still at your job, you typically may not withdraw money from your 401(k) account unless your plan allows hardship withdrawals to pay for immediate and serious financial needs. (Some plans do allow for other in-service distributions, but these are typically restricted to employees over age 59-½. In any case, the point is clear: retirement savings are meant for, well, retirement). However, if you leave your job, you can withdraw money from your 401(k) account, but it may cost you. That’s because your 401(k) plan is designed to help you save for a more comfortable retirement, and if you use it for another purpose, the IRS will penalize you. In fact, you’ll typically pay a 10% early withdrawal penalty if you withdraw money before reaching age 59½. Plus, you’ll pay income taxes on the distribution. If you invested in a Traditional 401(k), you’ll pay taxes on the full amount, and if you invested in a Roth 401(k), you’ll pay taxes on any earnings. Here’s how it works. Let’s imagine that you contributed $5,000 to your 401(k) account, and when it grows to $7,500, you decide to withdraw the full amount to pay a hospital bill. If you invested in a Traditional 401(k)… Your entire $7,500 withdrawal will be subject to taxes in addition to a $750 (10%) 401(k) withdrawal penalty if you’re younger than age 59 ½. If you invested in a Roth 401(k)… You would only pay taxes on the $2,500 in earnings—not on the $5,000 in contributions—however, you would still need to pay the $750 penalty if you’re younger than age 59 ½. Because an early withdrawal from your 401(k) plan could severely derail your retirement, you should only consider it as your absolute last resort. What are the long-term financial consequences of an early 401(k) withdrawal? Consider this: If you were in the 24% tax bracket, a $7,500 early withdrawal from a Traditional 401(k) will cost you $1,800 in taxes and $750 in penalties for a total of $2,550, leaving you with just $4,950. But that’s just the beginning of the price you may pay because when you withdraw funds early, you also miss out on the power of compounding, which is when your earnings accumulate to generate even more earnings over time. In this case, if you kept that $7,500 invested for 35 years, you could see it grow to $56,218!* *Projected balances estimated using Betterment's goal projection methodology. If you leave your company and are tempted to “cash out” your 401(k) plan, consider rolling it into an IRA or your new employer’s 401(k) plan instead. By doing so, you’ll benefit from tax-deferred or tax-exempt compounding and set yourself up for a brighter future. Are there any exceptions to the 10% early 401(k) withdrawal penalty? Yes, the IRS does allow some exceptions to the 10% early withdrawal penalty. These penalty-free withdrawals include: Rollover—If you roll over your money to another eligible retirement plan within 60 days. (Beware the “indirect” rollover, which may complicate issues and result in additional penalties if you’re not careful.) Death—If your beneficiaries receive a distribution from your 401(k) plan after your death Disability—If you become severely disabled and can show documentation of that fact from a physician Medical expenses—If your early 401(k) withdrawal is to pay for medical expenses not reimbursed by health insurance that exceed 10% of your adjusted gross income Qualified Domestic Relations Order (QDRO)—If distributions are to an alternate payee such as a child or former spouse following a divorce or separation Active duty military—If you are a reservist who is called to active duty for a period longer than 179 days or for an indefinite time Separation from service—If you are laid off, fired, or quit between age 55 and 59 ½ (However, this 10% penalty exemption only applies to assets in your most recent employer’s 401(k), or any other employer you left at/after age 55. If you withdraw assets from old 401(k)s with former employers, you’ll still have to pay the penalty.) Substantially Equal Periodic Payments (SEPP)—If you plan your withdrawals to meet SEPP requirements for a period of five years or until you turn 59½, whichever comes later What is a hardship withdrawal? If you need to take a withdrawal from your 401(k) plan account while you’re still with your employer, you may be eligible to take a hardship withdrawal if your plan offers it. The amount of money you can withdraw must be limited to the size of the need, and you will need to document and maintain proof of the need (even if you aren’t asked to provide proof when you request the withdrawal). For example, some plans offer hardship withdrawals to pay for: Qualified medical expenses Costs related to purchase of principal residence (for employee only, excludes mortgage payments) Tuition and education expenses Funeral expenses Costs to repair damage to principal house Costs to prevent eviction or foreclosure of primary residence Disaster relief Like any early withdrawal, you will be taxed, and IRS rules will govern whether you pay the 10% 401(k) withdrawal penalty. Consult your 401(k) plan’s rules for guidance on whether hardship withdrawals are available. How do 401(k) loans work? Some plans allow you to take a loan from your 401(k) account, but before you do, think about these important considerations: Most companies only allow loans to current employees. That means it’s unlikely that you’ll be able to take a loan from an old plan; however, you can roll your old balance into your current 401(k) plan and then take a loan. You may only borrow up to $50,000 or 50% of your vested account balance (the amount that belongs to you, which does not include any company matching contributions that have not yet vested). You must repay the loan through after-tax payroll deductions. Typically, the repayment term is five years or less. However, if you are using the money to purchase your principal residence, the repayment period may be longer. You pay yourself interest. Your 401(k) plan’s rules will determine the formula (for example, one point above prime). However, the interest may not be enough to make up for earnings you would have generated if you didn’t take a loan. Many plans limit you to having only one loan at a time, in which case you must repay your outstanding loan in full before taking another. If you leave your job while you have an outstanding loan, you likely need to repay it immediately. If you don’t, it will be categorized as an early distribution and you’ll owe income taxes and the 10% 401(k) withdrawal penalty. What are some good alternatives to taking a withdrawal or loan from my 401(k) plan account? Before you take an early withdrawal from your 401(k) plan account—and potentially do something you might regret—consider another option, for example: Alter your lifestyle—Whether you cut the cord on your cable subscription or transfer your credit card balance to a lower interest card, simple changes can save you money. Work a side hustle—Consider turning a hobby like baking or coaching tennis into a paying gig or think about subletting an extra room in your home. Look at other loan sources—If you have a significant amount of equity in your home, a home equity loan may be a cost-effective way to free up the money you need. However, be sure you understand the closing costs and other fees and are comfortable with the idea of putting your home at risk. Also know that certain early withdrawal penalties, like those for principal residence purchase or higher education expenses, are waived when withdrawn from an IRA, but not when withdrawn from a 401(k). If you need to dip into retirement accounts, a financial advisor will be able to help you understand which accounts to draw from and in which order to help you avoid or minimize unwanted taxes and penalties. Are there any other withdrawal penalties I should know about? In addition to the early withdrawal penalty, the IRS also assesses a penalty if you begin taking distributions too late. Specifically, the IRS requires that you begin taking withdrawals—known as required minimum distributions—from your 401(k), IRA, and other qualified retirement accounts once you reach age 72 (prior to January 1, 2020, these distributions were required once you reached age 70-½). This requirement exists because the government wants to ensure they receive the income tax owed on the money you have saved tax-free. It’s important to note that if you've invested in a Roth 401(k), you must take required minimum distributions; however, if you roll your money into a Roth IRA, you can avoid this requirement. How You Can Help Now that you have a better idea of how to answer your employees’ questions about 401(k) withdrawals, it’s time to be proactive. Instead of waiting for employees to come to you, consider hosting a meeting or sending an email to remind your employees of the ramifications of taking a plan loan or withdrawal. Wondering how to educate your employees about the plan? Betterment can help. As a full-service partner, we provide everything from compliance testing to communication support to ensure your 401(k) is effective as possible—and your employees have the support they need to succeed. Better for your employees. Better for your business. Betterment for Business. -
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Want to Boost Your 401(k) Plan’s Participation Rate? Here’s How.
Offering employees a 401(k) is a great first step toward helping them build a better future. ...
Want to Boost Your 401(k) Plan’s Participation Rate? Here’s How. Offering employees a 401(k) is a great first step toward helping them build a better future. The next step is to make sure they’re taking advantage of the plan. Offering employees a 401(k) plan is a great first step toward helping them build a better future. But the next step is to make sure they’re taking advantage of the plan. Wish your 401(k) employee participation rates were higher? You’re not alone. According to the U.S. Bureau of Labor Statistics, in March 2019, 77% of workers in private industry with access to a retirement plan were taking advantage of it. However, this rate varies dramatically by employee characteristics, industry, income level, and company size. In particular, lower wage workers (54%) and companies with fewer than 100 employees (71%) had lower 401(k) participation rates. How do your employee participation rates compare to these average rates? Take a closer look at the data at the U.S. Bureau of Labor Statistics. Why does 401(k) participation matter? For business owners, running a successful 401(k) plan is a significant investment of time and money. But if current (and prospective) employees appreciate the value of their retirement benefits, it’s well worth the investment. In fact, according to a Betterment for Business survey, 67% of plan participants said that a good 401(k) was very important or important when evaluating a job offer. However, if employees aren’t participating in the plan, this great benefit can fall flat. Plus, many studies have shown that personal financial stress negatively impacts employees’ performance, productivity, and ability to focus. This can have a damaging impact on business output, lead to higher employee turnover, and increase costs associated with hiring and retention. By encouraging employees to make the most of the retirement savings plan, you can help reduce their financial stress and allow them to focus on what matters most. So how do you turn things around and boost employee participation? Consider these 6 simple ways to boost your 401(k) plan participation rates: 1. Take the easy way out—Yup, that’s right—add automatic enrollment to your 401(k) plan and see your participation rates skyrocket! It’s a great way to help your employees save for their future without lifting a finger. (And pick a higher initial deferral rate—such as 5% or 6%—to help employees save more.) There are three different types of auto-enrollment arrangements: Basic Automatic Contribution Arrangement (ACA) When employees become eligible to participate in the 401(k) plan, they will be automatically enrolled at preset contribution rates. Prior to being automatically enrolled, employees have the opportunity to opt out or change their contribution rates. Eligible Automatic Contribution Arrangement (EACA) EACA is similar to ACA, but the main difference is that employees may request a refund of their deferrals within the first 90 days. Qualified Automatic Contribution Arrangement (QACA) QACA has basic automatic enrollment features. However, it also requires both an annual employer contribution and an increase in the employee contribution rate for each year the employee participates. For this reason, a QACA 401(k) plan is exempt from most annual compliance testing. 2. Try again—If employees opt out of automatic enrollment, that’s it, right? Well, not quite. According to the Plan Sponsor Council of America, in 2018, nearly 8% of plans annually re-enrolled employees who had previously opted out (that’s up from 4% that did so in 2013). Want to learn more about automatic enrollment? Read this article. 3. Give away “free money”—A 401(k) match, safe harbor, or profit sharing contribution offers a way to reward your employees and incentivize them to save for their future through your 401(k) plan. A matching contribution may not only increase your participation rate, but may help employees contribute enough to maximize the match (so think hard about how to structure that match!). 4. Eliminate or reduce the waiting period—Do you require employees to wait six months or longer before they join the 401(k) plan? Consider eliminating or shortening the waiting period. This way, you can promote the 401(k) plan during new employee orientation meetings and offer them the opportunity to sign up right away. 5. Offer employees the advice and guidance they need—The decision to invest in your 401(k) plan is a lot less intimidating if employees know they’re going to have help. Betterment offers personalized guidance to help employees make strides toward their long- and short-term goals ranging from paying down debt to saving for retirement. 6. Let employees know they can access their money in an emergency—If your employees are nervous about investing in the plan because they won’t have access to their money, consider adding loan and hardship withdrawal provisions. While taxes and penalties will hopefully discourage employees from using the funds unless they really have to, just knowing these features exist may provide the comfort some individuals need to participate. 7. Make the 401(k) plan participation rate known—Make the 401(k) plan participation rate part of your internal reports to help promote engagement. Consider assigning goals to encourage management (including those beyond human resources) to assist in boosting those numbers. 8. Communicate (and communicate some more)—Get the word out about your 401(k) plan. By promoting the benefits of the plan, you’ll likely be able to boost your plan participation rates (and even increase contributions). Consider showing the impact of plan contributions with compelling savings rate charts like this one: When it comes to selling the benefits of the plan, be sure to highlight things like contribution limits, the impact on income taxes (and how they’ll likely pay fewer tax dollars), and more. And find creative ways to encourage participation: talk up your own 401(k) plan participation as an example of what to do and what got you started. Consider asking respected and/or more tenured employees to talk about the importance of starting early. Betterment can help If you’re struggling with participation rates, take a hard look at your 401(k) plan. It may be time for a change. A Betterment 401(k) offers: More for your money—Our fees are well below the industry average, and we always tell you what they are so there are no surprises for you or your employees. Plus, lower fees mean that more money is staying invested for your employees. An easy-to-use platform—Our intuitive platform and goals-based approach help employees see their entire financial picture, with the ability to link outside accounts. Personalization for your employees—Our tech-forward solution takes into account employees’ age, savings, and retirement goals to create a personalized plan to help them save for the retirement they envision. A Betterment 401(k) plan can be better for your small business—and better for your employees. -
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Why Employee Engagement Matters Now, More Than Ever
Employee engagement is critical to the wellbeing of your workforce and company. Learn what ...
Why Employee Engagement Matters Now, More Than Ever Employee engagement is critical to the wellbeing of your workforce and company. Learn what employee engagement really means and how your company can improve. Across the United States and around the world, people are sheltering in place due to the COVID-19 pandemic. It’s far from “business as usual,” yet many employees are managing to stay productive and positive through it all. It’s a testament to people’s resilience—and to businesses’ effective employee engagement strategies. Now more than ever, employee engagement is critical to ensuring the wellbeing of your workforce and company. But what does employee engagement really mean and how can you improve yours? Let’s start with the basics. What is employee engagement? Employee engagement is a measure of employees’ dedication to your company. Gallup defines engaged employees as those who are “involved in, enthusiastic about, and committed to their work and workplace.” Engaged employees have an emotional commitment to the company and are willing to go the extra mile to help it succeed (technically known as “discretionary effort”). What about job satisfaction? Job satisfaction can often be confused with employee engagement. Job satisfaction is the level of happiness employees feel about their position in the company. It’s great if an employee has a high degree of job satisfaction, but it doesn’t necessarily translate to increased productivity or better business outcomes. In fact, some employees might be very happy contributing very little to the company while collecting a fat paycheck! According to the HR Technologist, the factors that affect job satisfaction and employee engagement are different: Job satisfaction is driven by competitive compensation, comprehensive benefits, a good work-life balance, and professional recognition. On the other hand, employee engagement is primarily driven by inspiring leadership, career development, internal communication, and a culture of diversity. Why is employee engagement important? The bottom line is employee engagement drives your firm’s literal bottom line. In fact, organizations in the top quartile of engagement had 21% higher profitability compared with those in the bottom. However, the same study also found that only 15% of employees worldwide and 35% of employees in the United States fall into the “engaged” sector. Having an engaged workforce will help you: Improve profitability Generate new ideas and innovations Reduce turnover Increase retention Improve productivity Boost customer satisfaction Make work a happier and healthier place for all What if employees aren’t engaged? It can take a long time for you or your human resources team to figure out an employee engagement program that resonates with everyone—from new hires and millennials to seasoned staffers and executives. Want a little extra help? Ask your staff for their input by sending out an employee engagement survey quarterly. If you’re able to measure employee engagement, you’ll be better able to figure out what needs to be adjusted. What can you do to improve employee engagement during a pandemic? With employees juggling health concerns, child care responsibilities, and more, it’s easy to see how some workers are having trouble being fully present and engaged in their work. In fact, an employee survey of more than 500 working moms revealed that 81% of respondents said their ability to engage effectively at work has been negatively impacted by the crisis. Both women and men have been feeling the stress and anxiety of trying to juggle it all. So, what can you do to help? If your staff is currently working from home, it can be hard to imagine what you can do to improve employee engagement from afar. But you can. Take a look at these employee engagement ideas: Check in—A recent Harvard Business Review article recommends that you nominate one person to be responsible for regularly checking in on employees’ wellbeing over the next three to six months. This way, any concerns, fears, and other issues related to working during a pandemic are caught before they escalate. Making your employees feel heard and providing assistance when needed can go a long way toward engaging your workforce. Select the right technology—What does your staff need to be able to effectively communicate while away from the office? Help alleviate frustration and facilitate relationship building by having the right instant messaging, video conferencing, and remote technology in place. Schedule a happy hour—Many employees are missing the social aspects of working in an office. So, think about recreating that employee experience virtually with a festive Zoom happy hour, game night, or group fitness class. What are some key employee engagement strategies? Pandemic or no pandemic, some employee engagement initiatives are highly effective in any climate. Here’s a list of the top three: 1. Manage well—When it comes to employee engagement, having good leaders matters a lot. In fact, research finds that 70% of the variance in employee engagement is due to their manager. So how do you inspire your leaders to excel? Consider sending your top managers to leadership training so they can gain the skills they need to motivate, recognize, and empower their staff members. Plus, investing in your employees’ continuing education has been proven to improve engagement and retention. According to LinkedIn, 94% of employees say they would stay at a company longer if it invested in their learning and development. 2. Help employees find deeper meaning—A key component of employee engagement is helping workers connect with their job on a deeper level. You don’t want your employees to just punch a clock, do the bare minimum, and collect a paycheck. It’s better for them—and for the company—if they can find greater purpose. According to the BetterUP Labs “Meaning and Purpose at Work” report, employees who find their work highly meaningful stay at their jobs for an average of 7.4 months longer than employees who don’t. Plus, employees doing meaningful work put in an extra hour per week and take two fewer days of paid leave per year! Here are a few ways to help instill greater meaning: Allow them to excel —Have a one-on-one conversation with employees about the company goals and their personal goals, and then see how they can be aligned for success. Even better, start the discussion during the onboarding process. Show them the results (and recognize them for their contributions)—Toiling away in obscurity isn’t fun for anyone. Let your employees know that their contributions matter to the company’s bottom line and that you appreciate their hard work. Seeing the results can help employees realize that what they do makes a real difference and deepen their connection to the company. Connect to the greater good —If employees know that their work is making the world a better place, it can help deepen their connection to their day-to-day jobs. 3. Improve your company culture—It’s difficult to quantify company culture, but everyone knows it’s important. According to a Deloitte study, 82% of respondents said that culture is a potential competitive advantage. However, only 28% said they understood their culture well and only 19% said they had the “right culture.” Deloitte defines culture as “the way things work around here.” Simply put, it encompasses all the values, actions, and incentives that make an impact on employees’ daily lives. Typically, the tone is set by senior leaders and trickles down throughout the organization. Ideally, your company culture will drive higher levels of engagement. So how do you improve your culture? Well, start by taking a step back and ask yourself: What are the values that make our company special? How do we want employees to feel when they work here? How can we change our performance management or compensation processes to reflect our company culture? Are we experiencing any toxic behaviors like fraud or extreme negativity? Is there an underlying reason why it’s happening? What can we do to attract, engage, and retain exceptional workers? How do benefits amplify our company culture? (Think tangibles like salary, 401(k) plan, and health plans as well as intangibles like flexibility and creative opportunity) Betterment can help Leadership, meaningful work, and company culture are integral to employee engagement. However, another driver of employee engagement and satisfaction is competitive compensation and benefits. Looking to upgrade your employee benefits package? Betterment can help you offer a better 401(k) at a fraction of the cost of most providers. As your full-service 401(k) partner, we: Get your plan up and running fast—and assist with the ongoing administration Select and monitor your investments (We assume the risk and responsibility as a 3(38) investment manager.) Offer your employees personalized guidance to help them save for long- and short-term goals ranging from retirement to debt reduction Want more information? Talk to Betterment today.
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How to Help Your Employees Deal with Financial Stress
How to Help Your Employees Deal with Financial Stress Employee financial concerns can have a major impact on your business. Learn what you can do to help ease employee financial stress. The COVID-19 crisis isn’t just a risk to our physical health—it’s also a risk to our economic health. In fact, a new survey from the National Endowment for Financial Education® (NEFE), revealed that nearly 9 in 10 Americans say that the pandemic is causing stress on their personal finances. With the unemployment rate hovering around 13%, many people are struggling to pay for housing, food, and other necessities. And even those who have jobs are feeling the squeeze. According to NEFE, the top ten financial stressors are: Having enough in emergency savings – 41% Job security – 39% Income fluctuations – 29% Paying utilities – 28% Paying rent or mortgage – 28% Financial market volatility – 25% Paying down/off credit card debt – 23% Having enough saved for retirement – 23% Paying health care bills – 19% Putting off major financial decisions – 17% Pandemic or no pandemic—many employees are feeling financial stress Between juggling childcare responsibilities and working from home, it’s no secret that employees are facing added pressure right now. Some may be forced to dramatically reduce their expenses because their spouse or partner has lost their job or had their hours reduced. Others may be caring for a sick relative—or even experiencing medical issues themselves. The pandemic has undoubtedly caused unprecedented levels of financial stress; however, even in the best of times, many employees are in financially precarious positions. In fact, according to research from Willis Towers Watson—conducted before the pandemic hit the United States—nearly two in five employees live paycheck to paycheck. And it’s not only those at lower income levels who are affected; even highly paid workers with generous employee benefits employees struggle financially. Notably, the survey of employees found that: 39% could not come up with $3,000 if an unexpected need arose within the next month 18% making more than $100,000 per year live paycheck to paycheck 70% are saving less for retirement than they think they should 32% have financial problems that negatively affect their lives 64% believe their generation is likely to be much worse off in retirement than that of their parents Employee financial concerns can have a major impact on your business Wondering what your employees are most concerned about? According to Fidelity Investments’® 2020 New Year Financial Resolutions Study, Americans’ top five financial concerns are: Unexpected expenses Personal debt (e.g., credit cards, mortgage, student loans) Not saving enough for short-term and/or long-term needs (e.g., retirement) Rising health care costs The economy, stock market volatility, or interest rates These financial challenges can increase stress levels, hurt job performance, and even damage health. Willis Towers Watson took a deeper dive into the attitudes of struggling employees who live paycheck to paycheck, and found that: 39% said money concerns keep them from doing their best at work 49% reported suffering from stress, anxiety or depression over the past two years (compared with 16% of employees without any financial worries) Only 39% of struggling employees were fully engaged at work If that’s not bad enough, a report from Salary Finance found that employees with money worries are 8.1 times more likely to have sleepless nights, 5.8 times more likely to not finish daily tasks, 4.3 times more likely to have troubled relationships with work colleagues, and 2.2 times more likely to be looking for a new job. As you can imagine, these feelings of disengagement, dissatisfaction, and anxiety can wreak havoc on employee wellbeing—and on your bottom line. In fact, Gallup research shows that U.S. businesses are losing a trillion dollars every year due to voluntary turnover. Companies may also experience reduced lost productivity, additional medical insurance expenses, increased absenteeism, and other unanticipated side effects of a workforce that’s financially stressed. More money isn’t always the answer It’s easy to read the statistics and think, “well, maybe we should just pay our employees more.” While your employees may appreciate a bonus or a raise—and it may temporarily ease some financial stress—it won’t solve the whole problem. Even highly paid employees experience financial stress because it’s less about the money and more about the money management and financial literacy. In fact, a Merrill Edge survey of more than 1,000 mass affluent Americans found that: 59% believe their financial life impacts their mental health 56% believe their financial life impacts their physical health 51% are worried about their finances over the next five years Excluding their mortgages, 73% are carrying some form of debt What can you do to help ease employee financial stress? You don’t need a big, expensive financial wellness program to help your employees. To begin, think about financial wellness benefits resources you already have at your disposal: Does your health insurance plan have an Employee Assistance Program (EAP)? In addition to helping employees navigate health care issues, EAPs frequently offer advice on budgeting, debt consolidation, retirement savings planning, and more. Do you have an in-house expert? Enlist your CFO or another financially savvy manager, CFO, or HR professional, to share savings tips or lead an information session to address common financial issues. answer commonly asked financial questions. Do you offer a 401(k) plan? If so, your 401(k) provider 401(k) provider likely offers a variety of educational tools and resources to help employees budget and save for retirement (and beyond). By leveraging these resources, you can begin the process of improving employee financial wellbeing. Betterment can help At Betterment, our mission is simple: to empower people to do what’s best for their money so they can live better. By using our innovative, online platform, employees can plan for their long- and short-term financial goals ranging from retirement to an emergency fund to a new house. Betterment’s unique technological solution: Takes into account employees’ ages, savings, and goals to create a personalized plan to help them save for the future they want Enables employees to link their outside assets, making it easy for them to see the full picture of their personal finances Can boost employees’ after-tax returns Beyond saving for retirement, Betterment helps employees gain control of their finances so they can reduce their stress and focus on what matters most. -
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Helping Latinx Employees With Their Unique Retirement Needs
Helping Latinx Employees With Their Unique Retirement Needs Support Latinx employees this Hispanic American Heritage Month—learn about their unique challenges when saving for retirement. National Hispanic American Heritage Month spans from September 15 through October 15 and, as a part of this month of recognition, we asked ourselves at Betterment for Business: "What are the unique challenges facing Latinx-American employees today? How can we learn about these challenges and address them as a part of our ongoing effort to promote Diversity, Equity and Inclusion at Betterment?" It turns out that not only do Latinx-Americans—the largest ethnic group in the U.S.—have disproportionately low retirement savings, but they also have disproportionately low access to savings. Plus gender and age also play a factor. For employers committed to building out a financial wellness program that helps all employees, understanding the intersectional issues and how Latinx employees have unique needs and challenges is key. In this article, we’ll cover three important learnings that can help inform your wellness programs, and build support for Latinx employees during this National Hispanic American Heritage Month and beyond. Latinx Employee Savings Lag Behind White Employees According to a 2018 report by Unidos US and the National Institute of Retirement Security, “four out of five Latino households have less than $10,000 in retirement savings, compared to one out of two White households.” And when comparing otherwise similar White and Latino households, researchers also found that “69% of working Latinos do not own any assets in a retirement account, compared to 37% of White households.” When Latino families are saving for retirement, they are saving significantly less money than their White counterparts. That said, younger Latinxs are eager to save. For example, they are 25% more likely to own an investment property than non-Hispanic White households, according to the Hispanic Wealth Project. Encourage Latinx employees to continue to diversify their investments and to set aside retirement savings in addition to their other assets—especially if you offer an employer-sponsored match that can help them reach their goals even faster. Access to Employer-Sponsored Retirement Plans is Also an Issue For Latinx-Americans, access to retirement-sponsored retirement plans is “significantly” lower than it is for White workers. Overall, about 31% of Latinx workers participate in a retirement plan, compared to 53% of White workers. But, to put this into further context, when Latinxs have access and are eligible to participate in a plan, “they show slightly higher take-up rates when compared to other races and ethnicities.” In other words, when a retirement plan is offered, Latinxs are more likely to take advantage, but they are significantly less likely to have that access in the first place. As such, Latinx-Americans, particularly younger populations, feel the pressure of providing a social safety net to their families and loved ones. They are 77% more likely to live in multi-generational households than non-Hispanic White households and, when surveyed, one half agreed that it was more important to help friends and family members now than to save for their own retirement. It is important to offer a full-picture financial wellness solution that helps to address the unique needs of Latinx workers, which can include planning for the retirement of their loved ones or investing in additional real estate for their growing families. Older Women are Disproportionately Affected More than one in five Latinx women over the age of 65 live in poverty. And without the income from work, this population would not be able to meet the cost of basic living expenses. Separately, Black and Latinx women make up a disproportionate share of domestic workers, with Latinx women making up over 29% of domestic workers as compared to only 17% of all other workers. Only 19% of domestic workers have access to health or retirement benefits, compared to 49% of other workers. COVID-19 exacerbated this disparity. According to the UN, domestic workers were particularly vulnerable to the economic effects of COVID-19 globally, causing 46% of Latinx survey respondents (compared to 42% of non-Hispanic Whites) to draw from their savings to cover expenses since the beginning of the pandemic. Consider your employee population and how factors like the pandemic may have affected them and the members of their household. Offer financial planning services and remind them that it’s never too late to get started with their savings, debt repayment, or other financial goals. -
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Helping Employees Set Up a Financial Safety Net
Helping Employees Set Up a Financial Safety Net Employers are looking for ways to help their employees save for unexpected financial emergencies. Betterment’s 401(k) platform can help. Your water heater fails. Your car breaks down on the side of the road. Your spouse loses their job because of a global pandemic. Life is filled with challenges, and some are more stressful and expensive than others. As a small business owner, you’ve likely witnessed firsthand how financial emergencies can impact your employees. Not only does the stress affect employees’ personal lives, it can also affect their work performance, attendance, and focus. That’s why an emergency fund —with enough money to cover at least a few months of expenses—is such an important part of your employees’ overall financial plan. However, many people lack this critical safety net. Rainy day funds are running dry According to research by the Employee Benefit Research Institute (EBRI), half of workers say they have a rainy day fund that could cover three months of expenses in the case of sickness, job loss, economic downturn, or another emergency. However, only one in five families actually has liquid savings of more than three months of income. Notably, EBRI found that the lack of an emergency savings fund was not limited to just younger employees or those with lower incomes—it’s an issue that transcends age and income. When faced with an emergency, employees without a financial safety net may turn to credit cards, take a payday loan, or even raid their retirement savings—triggering early withdrawal penalties and derailing their retirement savings progress. Having a solid emergency fund can help prevent employees from spiraling into a difficult financial predicament with wide-reaching implications. Craig Copeland, Senior Research Associate at EBRI, explains, “Given the low percentage of workers and families who have sufficient savings to cover a loss of income for any extended period, emergency savings programs could be directly beneficial to workers and indirectly beneficial to employers through higher employee satisfaction.” In fact, more employers than ever are encouraging their employees to save for unexpected financial emergencies. Emergency fund 101 So, what should your employees consider when setting up an emergency fund? At Betterment, we recommend: Saving at least three to four months of expenses—If employees have a financial safety net, they’ll feel more confident focusing on other important goals like retirement or home ownership. Investing emergency fund money—By investing their money—not socking it away in a low-interest savings account—employees don’t run the risk of losing buying power over time because of inflation. In fact, our current recommended allocation for an emergency fund is 30% stocks and 70% bonds. Making it automatic—Setting up a regular, automatic deposit can help employees stick to their savings plan because it reduces the effort required to set aside money in the first place. With an emergency fund, your employees have the peace of mind of knowing that they have a financial cushion in the case they need it now or in the future. Helping employees save for today—and someday Some employees may feel like they have to choose between building their emergency fund and saving in their workplace retirement plan. But it doesn’t have to be a choice. With the right 401(k) plan provider, your employees can save for retirement and build an emergency fund at the same time. For example, the Betterment platform is “more than just a 401(k) in that it provides: Quick and easy emergency saving fund set-up Betterment makes it easy to establish an emergency savings fund—helping ensure employees don’t need to dip into their 401(k) when faced with unexpected financial difficulties. If your employees aren’t sure how much to save, Betterment can calculate it for them using their gross income, zip code, and research from the American Economic Association and the National Bureau of Economic Research.Betterment will also estimate how much employees need to save to build the emergency fund they want to reach their target amount in their desired time horizon. Using our goals forecaster, employees can model how much they need to save each month to reach their emergency fund goal and view different what-if scenarios that take into account monthly savings, time horizons, and target amounts. Linked accounts for big picture planning Our easy-to-use online platform links employee savings accounts, outside investments, IRAs—even spousal/partner assets—to create a real-time snapshot of their finances, making it easy for them to see the big picture. That means that in a single, holistic view, employees can track both their 401(k) plan account and their emergency fund. Personalized advice to help employees save for today (and someday) By offering personalized advice, Betterment can help your employees make strides toward their long- and short-term financial goals. Our retirement advice and automated tax saving strategies like tax loss harvesting can help them avoid unnecessary taxes and save more for the long term. Ready for a better way to help your employees prepare for the inevitable—and the unexpected? Talk to Betterment today. -
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A Business Owner’s Guide to Employee Financial Wellness
A Business Owner’s Guide to Employee Financial Wellness If employees are stressed about their finances, it can have a negative impact on their work performance and on your company as a whole. Employees Are Looking to You for Help As a business leader, there’s a lot you can do to help. We at Betterment put together this guide, which includes tips on free and affordable benefits, as well as an annual checklist. We hope the guide helps your employees and business stay happy, healthy, and financially secure. -
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Financial Wellness Begins with a Great 401(k) Plan
Financial Wellness Begins with a Great 401(k) Plan Adding a 401(k) plan—or improving the plan you currently offer—can dramatically improve the financial wellness of your workforce. “How will I pay down my debt?” “Will I be able to afford retirement?” “How can I save for my future and put my kid through college?” These are the questions that are keeping your employees up at night. With the pandemic raging—and increasing concerns about health care, job security, and market fluctuations—financial stress is at an all-time high. In fact, the National Endowment for Financial Education® (NEFE), revealed that nearly 9 in 10 Americans say that the pandemic is causing stress on their personal finances. As an employer or a business owner, you may be wondering what you can do to help. Well, the answer is simpler than you may think. Adding a 401(k) plan—or improving the plan you currently offer—can dramatically improve the financial wellness of your workforce. Your employees may be more financially stressed than you might think According to research from Willis Towers Watson, nearly two in five employees live paycheck to paycheck. And it’s not only those at lower income levels who are affected; even highly paid employees struggle financially. Notably, the survey found that: 39% could not come up with $3,000 if an unexpected need arose within the next month 18% making more than $100,000 per year live paycheck to paycheck 70% are saving less for retirement than they think they should 32% have financial problems that negatively affect their lives 64% believe their generation is likely to be much worse off in retirement than that of their parents As you can imagine, this financial stress seeps into every aspect of your employees’ lives—including their productivity, engagement, and wellbeing at work. In fact, according to Willis Towers Watson, 39% of struggling employees said money concerns keep them from doing their best at work, and 49% reported suffering from stress, anxiety, or depression over the last two years. Financial stress can also trigger higher health care costs, more frequent sick days, and other unanticipated—and financially damaging—side effects. What will all this financial stress cost your business? Well, Gallup research shows that U.S. businesses are losing a trillion dollars every year due to voluntary turnover. Plus, the cost of re-hiring and re-training is compounded in smaller businesses because the loss of knowledge, subject matter expertise, and skills can be difficult to manage when there isn’t a deep bench of succession. Financial wellness is within reach—and this is what it looks like If financial stress can damage the fabric of your organization, financial wellness can help repair that damage. The Consumer Financial Protection Bureau defines financial well-being as: Having control over day-to-day, month-to-month finances Having the capacity to absorb a financial shock Being on track to meet financial goals Having the financial freedom to make choices to enjoy life In a practical sense, being financially healthy means spending within one’s means, having a plan for the future, and feeling confident that today’s decisions today will have a positive impact on the future. Employers who take steps to increase employee financial wellness—such as implementing a 401(k) plan—often experience benefits like increased retention and reduced absenteeism. According to an employee survey, 74% of employees say that financial wellness programs are an important workplace benefit and 60% say they’d be more likely to stay at a job if their employer offered financial wellness benefits that help them better manage their finances. The good news is that some 401(k) plans transcend retirement saving to focus on improving overall financial health. The path to financial wellness starts with a great 401(k) plan While employees may have investments outside of work, quite often, their employer-sponsored 401(k) plan serves as their primary long-term savings vehicle. That’s because features like convenient payroll deduction and automatic enrollment make it easy for employees to save for their future. And for those lucky enough to work for organizations that provide employer contributions, employees can be quite motivated to participate. However, according to the Bureau of Labor Statistics, only about half of employees participate in a retirement plan at work—illustrating a great opportunity for more employers to offer a plan (or work to increase participation). However, not all 401(k) plans are created equal. Some do a far better job at improving employee financial wellness than others. When evaluating 401(k) plan providers, consider the following questions: What types of educational tools and resources are offered and how accessible are they? Many 401(k) providers provide a wealth of educational tools and resources—including webinars and online articles—designed to help employees not just save for retirement but address other financial concerns such as budgeting, debt management, and how to manage taxes. Is personalized advice available and part of the overall fee? 401(k) education has advanced beyond traditional, staid group enrollment meetings, and technology can be essential in helping employees engage with the plan. This may even include individualized and comprehensive advice that can help employees make more informed decisions. Does the platform enable employees to see the bigger picture? Does the provider allow employees to sync outside accounts and track financial goals beyond retirement? Platforms that give employees a holistic view of their finances facilitate good saving habits. How do the fees stack up? Expensive (and sometimes hidden) fees can take a bite out of savings—and disrupt employees’ financial future. Affordable and transparent fees are critical to helping employees keep more of their savings working for them. What types of investments are offered and will they appeal to your employees? Plan providers often have unique perspectives on investments, so take the time to understand whether they will appeal to employees and how strategies will help employees reach their goals. Boost plan participation to boost financial wellness Even if your 401(k) plan offers a more robust approach that can help improve employee financial wellness, the critical first step is to get employees to take advantage of the plan. But that’s sometimes easier said than done. If you’ve struggled with participation rates in the past, consider: Giving away “free money”— Employer contributions (matching, safe harbor, or profit sharing) reward your employees and incentivize them to save for their future through your 401(k) plan. Enhancing communication—Whether you want to send an email, host a meeting, or talk to employees individually, get the word out about the benefits of your 401(k) plan and the full scope of available features. Targeted communication may help employees get started on the road to financial security. Revamping plan features—Consider shortening (or removing) the waiting period so employees can enroll as soon as they’re hired, accelerating the employer contribution vesting schedule, or enhancing the automatic enrollment features by increasing the default contribution rate or expanding the employees impacted. Reap the rewards of a financially well workforce Adding a 401(k) plan or improving your existing one can have a dramatic impact on the financial health of your workforce. Benefits include: Lower levels of employee financial stress Happier employees Less employee turnover Improved productivity Potentially lower healthcare costs Better business outcomes Betterment can help At Betterment, our mission is simple: to empower people to do what’s best for their money so they can live better. Our easy-to-use 401(k) platform ensures that employees can get personalized advice on their saving goals—in one place. From saving for a new house to planning for retirement, employees get the support they need to achieve their goals. Plus, our innovative technology: Takes into account employee ages, savings, and goals to create a personalized plan to help them save for the future they want Enables employees to link their outside assets, making it easy for them to see the full picture of their personal finances -
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Employee Retirement Preparedness: Millennials And Gen Z
Employee Retirement Preparedness: Millennials And Gen Z Unlike their predecessors, millennials and Gen Z-ers are facing changing economic, social and demographic trends that raise worrisome questions about retirement security. Millennials now make up the largest portion of the U.S. labor force, with Gen Z rapidly entering the workforce as well. Unlike their predecessors, these generations are facing changing economic, social and demographic trends that raise worrisome questions about retirement security. However, despite substantial focus on retirement products and services from the financial services industry, a large majority of millennials and Gen Z are still not adequately preparing for retirement. Betterment for Business’ survey “Employee Retirement Preparedness: Millennials and Gen Z,” tracks the financial well-being and retirement preparedness of full-time employed U.S. millennials and Gen Z. The goal is to understand the attitudes and behavioral constraints preventing these generations of workers from taking better control of their retirement and financial wellness. These insights can then be used to help financial institutions and advisers provide better advice and solutions to these customers. We also want to uncover just how knowledgeable this cohort is about basic 401(k) and retirement plans. With the decline of pensions and workers becoming increasingly responsible for saving for retirement on their own, that knowledge is more essential than ever before. The Good, The Bad And The Ugly: Millennial And Gen Z Finances Every generation is shaped by its circumstances — millennials and Gen Z are no exception. How are these two younger generations faring when it comes to finances? The bad news: There’s no doubt about it — younger generations are stressed about finances. 77% say that thinking about finances causes them stress. 20% are saving less than $100 monthly—including their 401(k) and other retirement savings accounts. Cash flow and debt challenges continue to inhibit responsible savings practices. 28% also receive some type of financial assistance from parents and/or family — no surprise for a generation coming of age during the 2008 recession and dealing with record high costs of housing and healthcare. The good news: Despite the challenges they face (or maybe because of them), these two generations are still trying to save for retirement as early as possible. They know they should be saving, but they still need help prioritizing, due to so many other financial stressors. 71% of Gen Z and 82% of millennials say they do not feel too young to start saving for retirement. 88% are actively saving some money on a monthly basis (including their retirement savings plan). 73% are contributing at least 3% of their monthly salary to their retirement savings plan. 23% are saving over 8% of their monthly salary for retirement savings. Figure 1: How much are Millennials and Gen Z saving each month? On average, how much money do you save on a monthly basis including your 401(k) retirement account? Challenges Of Unprecedented Debt Unprecedented debt is dragging down both generations, delaying financial priorities and negatively impacting attitudes toward retirement. Credit card debt makes up the largest debt segment — 75% of respondents said they owe some credit card debt and almost one in three owes more than $5000. To add to that, almost half (47%) of respondents currently owe some level of student debt. Those with high levels of debt may need to significantly reduce their current spending rates, or face substantial lifestyle changes down the line — perhaps even having to work beyond their traditional retirement age or sacrificing desired spending in retirement. Figure 2: Here's how student loan debt impacts financial decisions and behavior Conflicting Priorities While it seems as though most millennials and Gen Z understand the importance of saving for retirement, many have short-term concerns that take precedent over long-term planning. Each month, immediate financial demands and desires leave little left for long term savings — from rent and utilities to minimum debt payments and health insurance; from groceries and children or pets to vacations and local events. Behaviorally, it’s unsurprising: day-to-day life and needs are a visceral experience, more easily felt and understood than an account to prepare for life in 30+ years. Figure 3: Financial priorities: Millennials vs. Gen Z Percent indicating the following was one of their top financial priorities. 1 in 3 respondents are dipping into retirement funds early. One of our more concerning findings is that one in three respondents has dipped into their retirement funds early. Life doesn’t always go according to plan — 38% of respondents had to dip into their retirement savings account because of unexpected expenses such as medical debt. Individuals can often tap their 401(k) early via hardship withdrawal, but this comes with risks and consequences and should only be considered as a last resort. However, what is most alarming is that almost a quarter (23%) said they dipped into their accounts to fund travel / leisure activities. Not only are they putting their ability to retire at risk and losing out on compounding investment growth, but early cash outs of retirement savings (whether cashing out a 401(k) from a former employer or dipping into an IRA) often means a 10% tax penalty on top of income taxes for the withdrawal. Dipping into retirement savings for vacation impedes on future success. In essence, employees are starting in the right direction by putting away money for retirement but they’re not staying on track by preserving it for retirement as they should. Instead, they see it as another pool of money to be tapped into if and when ‘needs’ arise. Employers need to do more to help people recognize the benefits of keeping this money for retirement and letting it stay invested to work harder for them. We should note that while it’s easy to point to vacations as frivolous use of intended long-term savings, a greater portion of respondents tapped savings for medical expenses and debt payments; employers looking to address poor usage of retirement savings should blend education with broader wellness measures. Figure 4: Why Millennials and Gen Z are dipping into retirement savings early 1 in 3 respondents have dipped into their retirement funds early. Reasons why: Finally, many millennials and Gen Z may be falling behind on their retirement savings for a number of reasons: the decision making process (how much to save, how to invest, which accounts to use) can cause action paralysis; they may have been auto-enrolled at low, insufficient rates; or the compounding value of taking action today didn’t resonate or translate to action. Almost half (44%) of respondents have a retirement savings goal of under $1 million. The reality is that the right level of savings varies by person based on a number of factors; everything from what you earn today, where you live and how you spend, where and when you intend to retire, and how you plan to invest now and through retirement. That’s a lot to sink into one number. Betterment for Business suggests using tools that have clear assumptions for those factors and allows you to adjust as you see fit. Such tools help you understand how actions you take today help you meet your goals — not solely focused on an arbitrary-seeming number, but rather on a projected income level you can create in retirement. Saving and investing decisions have a more visceral feeling if you can compare it to your lifestyle in today’s dollars. Respondents know they need to save, but need help getting over the initial hurdles — deciding how much and where to save — and how to preserve the hard work they’ve put into savings, by investing well for the long term and avoiding cash outs and drains on future income for today’s needs. The new face of retirement. Once upon a time, when earlier generations had to walk to school in the snow uphill both ways, traditional pensions were the predominant form of retirement security. In 1980, 38% of workers in the U.S. had a pension plan. With these traditional pension plans, employers were responsible for managing the investments, and employees, once retired, could expect set monthly payments for as long as they lived. Yet by 2017, only 18% of private-sector workers had access to a pension; many surviving plans are also frozen, meaning they do not cover new employees. Instead, the majority of today’s workers participate in defined contribution plans — primarily 401(k)s. The shift away from traditional pensions has left many workers unprepared and unaware of how much they should be saving for retirement. Helping workers understand how to start investing, managing debt, and save for retirement has never been more important, especially given that younger generations are increasingly pessimistic about their retirement. Figure 5: Millennials and Gen Z expect to retire later, or never at all What benefits are employers offering now? 72% say their employers offer a retirement savings plan. (80% of these respondents say their company matches their contributions to the retirement savings plan). 48% say employers are also offering financial wellness benefits, such as workplace programs and resources that support the financial wellness of employees. More good news: The majority of surveyed employees leveraging employer retirement benefits are using them to their advantage: 75% are maximizing their company’s match. 90%are contributing some money to their plan. Almost half (48%) are contributing 5% or more to their retirement savings plan monthly. 50% have increased their monthly contribution over the last 12 months. Are women less prepared for retirement? We found that overall, men are more engaged than women when it comes to workplace retirement savings plans. A number of societal factors could be behind this: there still exists a significant disparity in how men and women are paid, with women earning on average 79 cents for every dollar earned by men; women are more likely to pause work to raise families or care for elder family members; and women often don’t invest with the same confidence as men. On the flip side, it’s even more critical for women to save and invest for retirement early and often — not only do they need to make up for lower wages and fewer years in the workforce, but they need to plan for a longer retirement, given their longer average lifespans than men. When evaluating retirement savings plan utilization, employers should pay attention to gender disparity and consider ways to reach all employees. Figure 6: Where women are falling behind on retirement preparation Even employers who are committed to gender equality may not realize the size of this disparity in utilization and preparedness. To correct it, they will have to take intentional and proactive measures, like understanding their employee’s needs and helping them more conservatively manage longevity risk — to ensure women are taking full advantage of benefits and preparing properly for retirement. Gig Workers And Benefits The future of work continues to shift towards part-time/gig work, and we’re beginning to see debates around offering benefits to this segment of the workforce. California recently signed a law forcing gig companies like Uber and Lyft to reclassify their workers as employees, which would make them eligible for benefits. Gig employers to date have been hesitant to classify workers as employees and offer them benefits, but popular sentiment is against them: over three- quarters of our respondents think that companies employing gig workers should offer them retirement plan benefits. Regardless of where the law lands on the treatment of the growing number of gig workers as contractors or employees, respondents felt strongly that companies should think more broadly about how to make it easier for all workers to save through retirement. Education, access to financial advice, and introduction to providers that make saving easy are just starting points for companies to consider. Figure 7: Should companies employing gig-workers offer them retirement benefits? Helping employees get a better handle on their retirement savings. 39% of respondents indicated they have funds in one or more former retirement savings plan (from a previous job, etc). Of these respondents, nearly a quarter (23%) indicated the reason is because they don’t know how to roll over these funds. Consolidating retirement accounts, or at least being able to see information about each in one place, makes planning and execution of decisions far easier. Having separate accounts scattered across past plans also makes it difficult to invest well, assess fees, and make decisions about how to manage those assets, nevermind increasing the likelihood of losing track of savings. Plus, past employers can force out smaller balances, sometimes cashing out those benefits (further reducing savings kept for retirement use). The above is a good problem to have — employees that are engaged and have savings in former plans are on the right path. Employers should help them make the most of their traction by: Making it easy to consolidate their retirement savings (via rollovers into the 401(k) plan, or choosing a provider that can help employees handle rollovers and see outside accounts in one place). Setting appropriate default savings rate for their plans, to keep the momentum going. Providing tools that make it easy for employees to understand where on their savings journey they are, and their next best steps toward a successful retirement. Conclusion The economic outlook is relatively positive, salaries and bonuses at an all-time high and interest rates at historical lows; yet burdened by debt and additional financial stressors, our survey finds younger generations of employees are still struggling with their long-term financial goals. Retirement plans continue to serve as a backup plan for many who don’t have money set aside for an emergency or unexpected expenses. The U.S. retirement landscape has changed dramatically over the past few decades. Health care costs are increasing, and so is longevity — which means workers today don’t just have more responsibility for saving for their own retirements, they also have to make those savings last, on average, for longer periods of time. Planning for retirement is now significantly more challenging. The future of retirement will look very different for these next generations and more will be looking to employers for help navigating the personal financial issues that are part of their changing environment. Employers should help employees save more. This report shows where employees are struggling and actions employers can take: Help employees manage financial stressors by providing education and tools that look at their whole financial picture, not disjointed, piecemeal information. Help them understand the benefits of starting to save early and increase their contribution rates over time, showing the impact of small changes on future incomes they can create. Target additional educational and support efforts at women so they don’t lag in their contributions. Help employees understand the benefits of consolidating assets into their current plan. Educate employees about the dangers of using retirement savings to fund other goals/needs/wants. Saving for retirement is about far more than picking funds and what to save that year; it’s about looking at employees’ broader financial pictures and how to best plan for their whole financial lives. Methodology An online survey was conducted with a panel of potential respondents. The recruitment period was September 27- October 1, 2019. A total of 1,001 respondents born between 1981-2001, living in the United States, who hold full-time jobs completed the survey. Of these a total of 695 millennials (born between 1981-1994) responded, and 306 Gen Z-ers (born between 1995-2001) responded. The sample was provided by Market Cube, are search panel company. Panel respondents were invited to take the survey via an email invitation and were incentivized to participate via the panel’s established points program.
