It’s open enrollment season at many companies, which means most employers will be doing all they can to get employees saving for their golden years. This data just might do it.
Fidelity Investments has just released new guidelines to help people understand how much they need to have socked away – and by when — in order to retire comfortably when that time comes.
And we’re not just talking about employees who are nearing retirement age. The benchmarks include figures for your younger employees who may have a tough time deciding to willingly part with a portion of their paychecks for a time that’s still decades away.
By sharing these numbers will all employees, you can encourage them to enroll now or even increase their contribution levels for greater peace of mind.
It’s a dollars-and-cents appeal that can’t help but get people re-evaluating their participation in your company’s 401(k).
Know where you stand at a glance
Part of the appeal: These benchmarks work no matter where people fall on the pay scale.
What people want to shoot for is to have eight times one’s salary level saved by the time they reach age 67. Here’s how that translates to what folks should be saving now, according to Fidelity:
- The equivalent of their annual salary in savings by age 35.
- Twice their salary by age 40.
- Four times their salary by age 50.
- Five times their salary by age 55, and
- Six times their salary by age 60.
No advanced degrees in math needed to know how close – or far – employees are from those goals. People can tell in a snap if they need to step up their participation based on their latest statement.
A full scale blitz
With such clear benchmarks in hand the next thing Finance wants to do is get them to all employees, whether they’re currently enrolled in your 401(k) or not.
Emails, posters in your break rooms, inserts in with people’s pay checks — you want to get people thinking about their own retirement preparedness. And don’t forget to include info on your open enrollment process.
Then be sure to have benefits staffers ready to field questions – because there’ll probably be plenty – as well as some resources they can direct folks to for more information.