Enrolling your employees in a 401(k) plan can be an effective way to keep them happy and engaged at work. However, it is important that your people understand what the account does and how to make the most of it. It is also a good idea to ensure that a worker understands that it is an asset that needs to be accounted for in his or her estate plan. Here are some ways you can help your employees with their retirement planning services that go beyond offering a 401(k).
Your Company Should Have a Dedicated Retirement Services Department
Ideally, your organization will have a small group of employees who do nothing but provide retirement planning advice to your workers. Alternatively, you can outsource this role to an outside company that has the knowledge and expertise to answer any questions an individual might have about retirement. Having a retirement planning service department shows your employees that you care about their futures and are willing to help them make the most of their money.
Remind Your Workers to Review Their Beneficiary Designations
In most cases, employees who participate in a company 401(k) plan will name their spouses as their account beneficiaries. This means that a surviving spouse will inherit any funds inside of a participant’s account at the time of his or her death. However, those who aren’t married may want to name an alternate beneficiary, and this may also be true for those who have gotten divorced. An estate planning attorney may be able to help a person create or review a beneficiary designation.
What If Employees Have 401(k) Accounts from Previous Employers?
An employee retirement services department can help workers decide if they should transfer funds from a former employer’s 401(k) to the one offered by your company. New employees should be given an overview of how the plan invests participant contributions and the potential tax consequences of moving money from one account to another.
Tailor an Investment Approach That Meets a Person’s Needs
A retirement services department can help your workers plan a future that makes the most sense for them. For instance, investing in growth stocks or funds is maybe a great idea for younger workers who are focused on building a nest egg as quickly as possible. However, older workers may want to invest in government bonds or other safe assets.
Employees deserve to make educated decisions about their retirement funds. As an employer, it is your responsibility to ensure that they have whatever tools that they need to do so.
Brooke Chaplan is a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most of her time hiking, biking, and gardening. For more information, contact Brooke via Facebook at facebook.com/brooke.chaplan or Twitter @BrookeChaplan