Workplace Changes to Retirement Planning
October 21, 2020
With unemployment figures having hit an all-time high, and average incomes falling dramatically, it’s no surprise that there have been some recent changes to retirement planning in the workplace.
Recent surveys highlight retirement uncertainty:
In recent surveys, participants were asked if they believed Covid-19 would have an impact on their retirement planning by forcing them to work for longer than they had planned, and more than 10% answered in the affirmative. From the results, those answers came predominantly from individuals aged between 45 and 54 years of age, and with reports indicating that some employers have begun suspending 401(k) matching contributions, around 4% of those surveyed said that their employers had done the same. Unfortunately, it’s predicted that this number will grow, especially if businesses are forced to remain closed due to the pandemic, or fail to recover sufficiently once the situation has calmed down.
It’s not all negativity:
However, the surveys showed that the majority of working Americans have not changed their expectations about retirement and when they plan to do it, despite the pandemic, and most don’t believe they will be made to retire sooner than they had planned or anticipated.
For the most part, in fact, it seems that few Americans have made changes to either the amount of money that they’re currently investing, or the manner in which they’re investing it, and less than 5% of those surveyed reported having made any changes to their asset allocation. An even smaller amount of people stated that they had lowered their 401(k) or IRA contributions.
With a whopping 70+ survey participants stating that they haven’t changed anything about their retirement planning due to the pandemic, could it be that the American workforce are actually optimistic about the future and their retirement?
Small business retirement solutions:
Whatever course the pandemic may take as the weeks and months pass, people will always need, and want to retire, from their jobs, and employers must continue to make retirement plans a priority if they want to retain their existing staff, and attract new ones when the situation improves.
Retirement continues to be the most sought-after benefit following health, and with precious little set to change that, is it time you reevaluated your options?
Should you offer your employees a 401(k)?
Enabling you and your employees to save for retirement, with a 401(k) you can both put money away on a pre-tax basis, in turn, lowering your taxable income. For your employees, not only does this give them a reduced tax hit on their annual salary, but their long-term investments will flourish tax-free until the day comes that they’re ready to retire. For you, you’ll have a far more contented workforce, while saving cash for you and your personal nest egg.
If you need to reevaluate the retirement benefits you currently offer your employers, talk to a professional provider about your options, today.