Retirement planning is an effective way to enable employees to live more comfortably in their golden years. According to a survey published by The Pew Charitable Trusts, 53 percent of small- to mid-sized businesses now offer a retirement plan to employees. An employer will generally offer a 401(k) or Health Savings Account (HSA); however, these are not the only types of employer-sponsored retirement plans that exist. Some others include defined benefit pension plans, Roth 401(k) plans, 403(b) plans, 457 plans, SEP plans, and SIMPLE plans.
While most people know the importance of retirement planning, not all fully understand what options are available to them and what these plans entail. Retirement plan consulting is an excellent way to learn more about the various types of retirement plans and how they can benefit both employees and employers. A retirement plan consultant can also answer any questions or address any concerns that employees or employers may have about their plans.
Aspects Of Retirement Plan Consulting
Retirement plan consultants play a critical role in a business by helping to mitigate risks, outline fiduciary responsibilities and recommend appropriate plans based on employee needs and cost parameters. A retirement plan consultant will generally provide several key services, such as plan design consulting, to determine if a plan is able to meet all requirements. Retirement planning can also include education assistance which involves improving employee communication and ensuring that all staff is aware of their retirement plan options. A retirement plan consultant can even help establish and maintain a planning committee, as well as develop the responsibilities and roles of each member.
Planning For The Future
Many Americans struggle to save for their future. According to a survey from Bankrate that asked 1,000 working American adults how much of their annual income they save for retirement and other financial goals, 20 percent admitted that they save 5 percent or less, and 28 percent saved between 6 and 10 percent. Just 16 percent said that they saved more than 15 percent of their income. Retirement plan consulting can help employees work toward their savings goals by choosing a retirement plan that meets their financial and personal needs. Retirement plan consulting can provide informative information, such as how much risk to take, the rate of return needed on investments, and how much income can be safely withdrawn from a portfolio without encountering hefty penalties.
Picking Out Effective Retirement Plans
The right retirement plan can help employees build a nest egg while providing other important benefits. Individual retirement accounts, or IRAs, are some of the most common retirement plans. These tax-advantaged accounts have annual contribution limits that can change from year to year. However, it can sometimes be advantageous to choose another type of retirement account, such as a 401(k). Factors to consider when choosing a retirement plan includes the employee’s age, retirement horizon, and whether the funds are solely for retirement or for beneficiaries. Retirement plan consulting can provide the information needed to make these important decisions.
Attracting & Retaining Competitive Employees
Retirement plan consulting can aid employers in attracting and retaining talent. With more companies now offering a variety of attractive employee benefits, it has become harder for business owners to retain the cream of the crop. Through retirement plan consulting, business owners can gain a better understanding of what retirement plans employees are looking for when choosing a new job position. Adding an attractive retirement plan to an employee benefits package can help draw in talented employees looking to save for their future.
Easing Stress From Management
Management often faces numerous responsibilities on a day-to-day basis. This may include assisting employees with setting up retirement plans and answering questions about the different plans available. While most business leaders have a solid understanding of employer-sponsored retirement plans, it is impossible to know everything. Working alongside a retirement plan consultant can help fill in the gaps. When a business invests in retirement plan consulting services, they can gain new and updated information about retirement plans, tax breaks, employer matching, contribution limits, and other important details that can then be shared with staff. This can help to lessen the burden on management.
Work With The Retirement Plan Consulting Professionals
Many employers choose to provide retirement plan options to help employees save for their future. Employers have the responsibility of satisfying their fiduciary obligations and understanding the liabilities that impact the company. Employees have the responsibility of grasping the different types of retirement plans available to them and choosing one that will meet their financial and personal goals. A retirement plan consultant can help in both aspects by providing important information and guidance. To learn more about retirement plan consulting services or to hire a retirement plan consultant to assist with retirement planning, reach out to the employee benefits experts at BenefitCorp.