Did you know? Half of Americans have nothing put away for retirement, and among those who do have savings, 35 percent have a mere $1,000 put away.
That's why America Saves Week, an initiative to encourage households to build wealth through savings, is so crucial. Organized by non-profit organization America Saves, the week-long event features a daily theme to promote healthy savings habits:
- February 26th: Save with a plan
- February 27th: Save the easy way ... automatically
- February 28th: Save for rainy days
- March 1st: Save to retire
- March 2nd: Save the extra
- March 3rd: Save as a family
Why business owners should care about employee savings
Why should business owners care about their employees’ savings? According to the America Saves organization, "employees who learn how to effectively manage their benefits are more empowered, more engaged, and more satisfied with their compensation, benefits, and overall jobs."
While many small businesses don't offer a retirement savings plan, it may be time to reconsider. Some of the benefits business owners can enjoy when offering employee retirement plans include:
- Tax-deductible retirement contributions: your employer contributions to 401(k) plans are tax-deductible, which can help lower your overall tax obligation.
- Business tax credits: businesses with less than 100 employees are eligible for a tax credit of the lesser of 50 percent, or $500, of the startup costs incurred to create a retirement plan.
- More invested employees: employee benefits such as a retirement plan are essential to retaining great talent. Offering a 401(k) to help employees meet their personal retirement goals can minimize attrition and lead to more committed team members.
- Personal participation: As the business owner, you also get to participate in the retirement plan you offer, which can help you focus on saving for the long term.
Encouraging your employees to save
A retirement fund is just one aspect of long-term financial stability. There are many small changes employees can make today to ensure they're prepared for the future – whether it’s dealing with future healthcare costs or making a retirement dream a reality.
With the help of America Saves Week, you can become an advocate for your employees' financial stability by educating them to take control of their finances with some savings tips:
An auto-enrollment feature in a retirement plan can essentially eliminate procrastination and indecision about saving, and help set employees down the right financial path. Take advantage of this by simply opting in to auto-enrollment when you set up your company's 401(k) plan. Keep in mind that employees can choose to opt out.
Encourage employees to use direct deposit for paychecks. This saves both of you time and money, but more importantly, it can give employees the opportunity to direct part of their paycheck to their retirement or rainy day fund.
There's an old saying, "The more you make, the more you spend." Sadly, this seems to be true given the current state of saving among Americans. But what if that extra money earned went directly into a savings or retirement account on payday? By offering employees a split-to-save feature through direct deposit, you can encourage more saving by ensuring a percentage of every paycheck is retained.
How to participate in America Saves Week
It's clear that small businesses can benefit in a big way from employee savings and financial health. So how can you help your organization thrive? America Saves Week 2018 is just around the corner and offers a slew of free online tools and resources for businesses that want to take part.
As a business owner, you can become part of a movement that inspires change and promotes employee well-being. Empowering employees to take advantage of their financial future is a win-win that can lead to employee happiness and retention.