Impact on long-term organizational success
Research shows only about one in five Americans are confident they'll have enough money to live comfortably throughout retirement. Disclosure 1 Employers that recognize the seriousness of the retirement readiness challenge can help turn this situation around.
For employees, a lack of retirement readiness can mean being forced to continue working during a time in their lives when they'd rather be doing other things. Also, some employees of retirement age that have inadequate retirement savings may be unable to continue working because of age-related health problems, a financial disaster.
For employers, a broad retirement readiness shortfall can result in a less motivated and productive workforce, higher payroll and employer-paid health benefits costs, and limited opportunities for younger workers.
Participant communication and plan design
Addressing the challenge of maximizing employee retirement readiness requires the creation of a clear strategy, with effective steps on two fronts: participant communication and plan design. A retirement plan services professional can work with plan sponsors to build and implement such a strategy.
The key to the communication component is participant engagement. When employees take advantage of retirement-savings calculators and translate general principles to specific dollar amounts applicable to their situation, they become engaged. Effective retirement modeling tools can incorporate existing retirement savings along with hypothetical future actions and translate it all to projected monthly income at retirement.
When such tools are offered in the context of a sustained, demographically targeted, retirement planning educational campaign using multiple communications media, they prompt employees to adjust their savings pattern to achieve their goals.
Plan design works hand in hand with effective participant communication and education to keep employees on the path to retirement readiness.
In recent years, most plan sponsors have come to accept the importance of giving employees a firm nudge to take full advantage of their retirement plan through auto-enrollment features. Concern for employee retirement readiness has generally overtaken worries about being overly aggressive in inducing particular employee behaviors and the added cost in employer-matching contributions of maximizing participation rates.
Another important plan design element that can enhance employee retirement readiness is the automatic contribution step-up, which is also becoming more commonly accepted as a default feature.
Simplifying participant decision-making with suitable plan investments is also a key driver of retirement readiness. The popularity of target-date retirement funds reflects that principle.
Guiding employees along the right path
The job of putting employees on a steady path to retirement readiness is a dynamic and multidimensional process. It's also crucial to your organization's future. The task can be made easier with the support of a retirement plan service provider that can offer employees a host of complementary services supporting their financial needs.
Interested in more detail?
Want to explore more topics?
2016 Retirement Confidence Survey, available at ebri.org/retirement/retirement-confidence-survey/2016-survey-results.
Only deposit products are FDIC insured.
Investment and Insurance Products:
• Are not FDIC or any other Government Agency Insured • Are Not Bank Guaranteed • May Lose Value
Truist, BB&T®, BB&T Securities®, BB&T Sterling Advisors, Sterling Capital®, BB&T Investments, BB&T Scott & Stringfellow®, SunTrust®, SunTrust PortfolioView, SunTrust Robinson Humphrey®, SunTrust Premier Program®, AMC Pinnacle®, AMC Premier®, Access 3®, Signature Advantage Brokerage, Custom Choice Loan®, SunTrust SummitView® and GFO Advisory Services® are service marks of Truist Financial Corporation. All rights reserved. All other trademarks are the property of their respective owners.
Services provided by the following affiliates of Truist Financial Corporation: Banking products and services, including loans and deposit accounts, are provided by SunTrust Bank and Branch Banking and Trust Company, both now Truist Bank, Member FDIC. Trust and investment management services are provided by SunTrust Bank and Branch Banking and Trust Company, both now Truist Bank, and SunTrust Delaware Trust Company. Securities, brokerage accounts and /or insurance (including annuities) are offered by SunTrust Investment Services, Inc. and BB&T Securities, LLC, and P.J. Robb Variable Corp., which are SEC registered broker-dealers, members FINRA, SIPC, and a licensed insurance agency where applicable. Investment advisory services are offered by SunTrust Advisory Services, Inc., GFO Advisory Services, LLC, BB&T Securities, LLC, Sterling Capital Management, LLC, Precept Advisory Group, LLC, and BB&T Institutional Investment Advisors, Inc., each SEC registered investment advisers. BB&T Sterling Advisors, BB&T Investments and BB&T Scott & Stringfellow are divisions of BB&T Securities, LLC. Mutual fund products are advised by Sterling Capital Management, LLC. Mortgage products and services are offered through SunTrust Mortgage, a tradename for SunTrust Bank now Truist Bank.
The information contained herein is for informational purposes only and does not represent an official statement of your SunTrust Investment Services, Inc. account. Please refer to your monthly or quarterly statements for a complete record of your transactions, holdings, and balances.
"SunTrust Advisors" may be officers and/or associated persons of the following affiliates of Truist Financial Corporation: SunTrust Bank now Truist Bank, our commercial bank, which provides banking, trust and asset management services; SunTrust Investment Services, Inc., a registered broker-dealer, which is a member of FINRA and SIPC, and a licensed insurance agency, and which provides securities, annuities and life insurance products; SunTrust Advisory Services, Inc., a SEC registered investment adviser which provides Investment Advisory services.
SunTrust Private Wealth Management, International Wealth Management, GenSpring, Business Owner Specialty Group, Sports and Entertainment Group, and Legal and Medical Specialty Groups are marketing names used by SunTrust Bank now Truist Bank, SunTrust Investment Services, Inc., and SunTrust Advisory Services, Inc.
SunTrust Robinson Humphrey is the trade name for the corporate and investment banking services of Truist Financial Corporation and its subsidiaries, including SunTrust Robinson Humphrey, Inc., member FINRA and SIPC.
The information provided should not be considered as tax or legal advice. Please consult with your tax advisor and/or attorney regarding your individual circumstances.
Branch Banking and Trust Company, Member FDIC.
New York City residents: Translation or other language access services may be available. When calling our office regarding collection activity, if you speak a language other than English and need verbal translation services, be sure to inform the representative. A description and translation of commonly-used debt collection terms is available in multiple languages at www.nyc.gov/dca.
Branch Banking and Trust Company is now Truist Bank. Learn more.
BB&T and SunTrust have merged to become Truist. Both institutions will continue to offer independent product lines for a period of time. This may include differing underwriting guidelines, product features, terms, fees and pricing. Our friendly teammates at your local SunTrust branches will be happy to walk you through their respective products. You can also learn more by contacting them at 800-SUNTRUST or SunTrust.com.