Employees have many reasons for falling behind on their retirement savings. Recently, an increasing cost of living, student debt and low salaries are cited as the primary factors creating obstacles to retirement savings, according to plan sponsors surveyed by TIAA and C Space for the “TIAA Pulse Survey; Playing Catch-up” study.
Plan sponsors who responded to the survey also pointed to an increasingly prevalent attitude of kicking the retirement can down the road for some employees who are more focused on current expenses or things they want to spend their money on now, believing they can adequately catch up on retirement savings later.
One plan sponsor said they are looking forward to implementing the student loan matching provision of SECURE 2.0 when it goes into effect next year to combat the student debt obstacle to retirement savings, especially for young participants who often have smaller salaries to begin with. The provision will allow employers to make a contribution to a participant’s retirement plan to match that participant’s payment on a qualified student loan.
For now, plan sponsors are using several strategies to keep employees on track with their retirement savings, or catch up if they’ve fallen behind. Successful anecdotes include everything from providing graphical depictions of the value of saving for retirement to providing one-on-one education opportunities with plan advisors.
Education about topics such as budgeting is one key strategy plan sponsors...
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