Supporting employees with retirement planning in times of inflation

Q: What practical tips can employers give their employees to protect their savings and investments in the face of a looming recession?

• Offer educational workshops and webinars and emphasize the importance of financial education being the beginning of everything. Action: Host regular financial wellness workshops or webinars focusing on topics such as building an emergency fund, diversifying investments, and budgeting.
• Use personalized financial tools. Action: Provide access to personalized financial planning tools, such as budgeting apps or investment calculators, that help employees manage their finances more effectively.
• Create incentives for participation in savings programs. Action: Offer incentives to employees who actively contribute to their emergency savings account (ESA), such as matching contributions or milestone bonuses.
• Offer individual financial advice.

Q: Are there special programs or tools that employers can offer their employees to help them better plan for retirement?

A: The most practical recommendation we give companies for employee engagement is to simply set up an ESA, a benefit that allows employees to automatically save a portion of their salary specifically for unexpected expenses. Integrated into payroll, it provides employees with a convenient way to build a financial safety net without any additional effort.

High levels of debt and low savings rates leave many workers financially vulnerable. An ESA provides them with a simple and effective way to build an emergency fund, reduce their reliance on credit cards, and protect their financial health over the long term.

Q: What alternative investment opportunities could employers/plan sponsors offer employers in this volatile market?

A: The best asset classes for this volatile market are commercial real estate, fine art and venture capital. Why? Not only is commercial real estate a long-term asset that has performed amazingly well over time, but I believe it has bottomed out, meaning there is tremendous opportunity for a rebound. Essentially, the same is true for venture capital, and since these age groups are putting these investments into retirement plans or savings plans, they are designed for long-term growth. Fine art has proven to be one of the most resilient and best-performing investments during periods of elevated inflation and interest rates over the last 50 years.

Q: What are best What financial health benefits can employers offer younger employees?

A: Student loan repayment assistance, access to financial education and literacy programs, emergency savings accounts, flexible budgeting and savings tools, retirement planning assistance, health savings accounts, financial counseling services, and employee discounts on financial products.

Q: How can employers best prepare soon-to-be retirees for the transition to retirement?

A: If there is one thing I can highlight (and I think AARP does this well), it is providing access to discounts on a variety of life needs, especially financial products, as well as educating people about financial fraud and scams to prevent retirees from becoming victims.