I read in the paper today (Star Tribune, 1/1/2018: “Helping workers solve money angst”) some amazing figures.  According to the surveys that were cited, there are a considerable number – a third – of employees who feel uncertainty about money.  These folks think we will be going into a recession this coming year.

This is surprising because the economic data shows that we have some of the lowest unemployment rates, the consumer is spending, restaurants seem full, all of which contributes to strengthening economic growth.  For the people who feel stress about the economy, it is because they have their own financial uncertainty.  For someone who has debt – maybe kids in school or college – may feel they are not saving enough for retirement.  They have a good life from outward appearances, but deep down they know they aren’t saving enough for retirement, they don’t know how much they need to be saving. They think they may have to work forever, and they don’t know how to get a leg up on their personal debt.  This can become especially complicated when these same people have a parent or parents who are requiring assistance with health care, or needing expensive long-term care.

If you are an employer, you might be thinking: how many of my employees have financial stress every day?  They are bringing this point of view to work.  Does it make them less productive?  Are they leaving work to go help a parent?  Are they saving enough in the work retirement plan?  (You can check your plan.  The record keeper can provide reports that show how much people are saving.  If you find they are saving under 10%, they may not be likely saving enough.)

We see employees who share these same concerns and issues when we go out to do one-on-one sessions with our 401(k) Retirement Plan client employees.  I find that when I sit down with an employee who has financial stress, they have a sense of despair and they can appear to lack hope of a successful retirement.  At Waterfront Financial Group, we like to see what we can do to help, by meeting with each employee, each year.  (Sometimes I see employees coming in to see me in the conference room every six months.)   If an employee has debt, we can recommend a “debt snowball” strategy to help them get out of personal debt.  We talk about mortgage refinancing.  We discuss expenses and resources for college. And of course, we discuss retirement savings.

We use a visual aid to help people see how much they have now.  I like to say, we aren’t going to spend time looking through the rearview mirror, instead, we shall look forward: how much do you have now, how much will you need, how much can you expect your savings to grow, add in the employer match, how much will you get from social security, and how much time do you have to work.  Once we know or estimate these answers, we calculate how much that person should be saving from each paycheck.  If it is more than they are saving now, we provide ideas how to free up cash flow from their current spending so they can save more for retirement.

Saving money is hard to do, especially with unlimited wants and expensive needs.  Employers can help employees by providing them with access to financial planners at the work place.  This can be done through Employee Assistance Programs, or you can hire financial planners to come out periodically, or you can have an advisor be added as the broker of record, if permitted, to your 401(k) plan.  I am not talking about the group meeting many plan brokers conduct annually.  I am talking about an advisor who has a folder for each employee, and makes a point to communicate with each employee, like the employee is a client of the advisor.  [We call this the “Waterfront Difference” – see our website for more on this concept.]

What else can the employer do?  There are lots of things the employer can do to improve the financial well-being of their employee’s retirement savings efforts.  One thing an employer can do is auto-enroll everybody into the plan.  That gets the people who are not saving to start saving.  I have heard some employers say it isn’t their responsibility; they say, we offer the plan, that’s enough, if they don’t do it that’s their business.  You know what – it is in your business in they work, and if they are stressed about money, it is your business it affects.  There are several other things the employer can do – we call these ideas courageous plan design solutions.

Retirement readiness is something every employee needs to consider. Helping your employees with financial stress over retirement readiness can help your employees to be happier and less anxious.  Happier and less stressed employees can also lead to higher production, and that is your business.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.