Empower Your People: The Value of Educating Employees on Retirement Planning

Employee retirement plan education is something you, as a senior leader, should really be thinking about. We know a good salary is table stakes in attracting and retaining top talent. Today, employees are also laser-focused on their long-term financial security. That’s why a solid retirement plan is so crucial. However, even the absolute best plan isn't going to achieve its full potential if your employees don’t actually understand it. That's where investment in education comes into play, and honestly, it goes far beyond helping employees, deep into the health of the entire organization.

Think about it. Financial concepts like compound interest, asset allocation, dollar cost averaging, and inflation? They can be tricky. Many of your people struggle with these, which can lead them to under-contribute, make poor investment choices, or miss out on your generous matching contributions. Ultimately, they miss out on growing their retirement nest egg. 

When employees feel confident about their financial futures, they’re more engaged and productive. A focused workforce translates to better morale and less turnover, which we know is expensive and disruptive.

 How do we fix this? How do we bridge that knowledge gap?

1. Start early and keep the conversation going. This isn’t just for pre-retirees. Younger employees need to understand the magic of compound interest and why early contributions matter. Regular sessions, maybe even online courses, keep everyone in the loop, no matter where they are in their career.
2. Everyone's financial situation is different. You need to tailor your approach. Beginners need the basics, while those with some knowledge might want to get immersed into more advanced topics like navigating market uncertainty and tax implications. Customized learning is ideal.
3. Make it interactive and fun. Employees typically don’t love lectures! Retirement calculators, one-on-one coaching - anything that gets people actively involved is a great idea. When your people see how their choices impact their future, it will hit home for them.
4. Lean on the experts. Partner with financial advisors who can create custom programs. Also lean on your retirement consultant - like us at People Corporation. Workshops, webinars, individual consultations - it's expert advice that carries weight. Plus, it's one less thing for HR to manage.
5. Build a genuine culture of financial wellness. This conversation is bigger than just retirement planning. Budgeting, debt management, even financial mental health - it's all connected. When employees know you care about their holistic well-being, they're more likely to engage with your programs.

The organizational impact is significant. Educated employees are more satisfied with their compensation, which means lower turnover. Plus, a well-informed team asks fewer basic questions, freeing up HR to focus on strategic initiatives. Simply put, a strong plan isn’t enough. You need to ensure employees can understand the plan to maximize it. By investing in financial wellness, decision-making tools, and ongoing engagement, you’re empowering your people and strengthening your company.

Want to explore this further? 

We’ve put together a detailed report that studies the latest research on the state of financial literacy and retirement plan engagement. It has some actionable steps for you to maximize the impact of your benefits program. You can download our full paper here.