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Your Employees Aren’t Preparing for Retirement

How often do you think about your retirement plan? Has it always been a source of daydreaming — you’ll finally get to travel or spend more time with family! — or has it been a source of dread? Are you or people you know worried about being able to pay the bills in old age?

The average American isn’t saving enough for retirement. If the statistics are anything to go by, most of your employees are probably worried about having enough to make it through their “golden years” and beyond.

Even if employees plan to work as long as they can, declining health and other challenges can force eventual retirement. For some, that can be a major source of anxiety, especially as healthcare costs continue rising.

Luckily, as the employer, there are several things you can do to help ease everyone’s minds.


Financial advisors often advise that employees put at least 12-15% of their income toward retirement. But according to Vanguard’s “How America Saves 2022” report, the average 401(k) retirement plan contribution rate is below that for every age bracket under 55. And while some employees have other types of retirement plans, many don’t have one at all.

The U.S. 2020 Census found that only 58.1% of working-age baby boomers (ages 56-64) owned any kind of retirement account, with Gen X (ages 40 to 55) at 56.1% and millennials (ages 24 to 39) at less than half. That’s a lot of people who aren’t saving for retirement!

Maybe your employees are unusually financially savvy and unburdened by other major financial concerns. But if not, most of them probably aren’t saving enough for retirement.





In the U.S., the most common way to save for retirement is through a 401(k) plan offered by an employer. A 401(k) plan lets employees contribute a portion of their wages to employer-sponsored, tax-advantaged retirement accounts — up to $22,500 in 2023. The contributions automatically come out of their paychecks. In most cases, the employer will also match some of the employees’ contributions by adding extra to the account.

At larger companies, 401(k)s are a common part of the employee benefits program. But at smaller companies, it’s another story.

According to research by Guideline, 90% of businesses with less than 100 workers don’t offer their employees a 401(k) plan. For the smallest businesses, offering a 401(k) might take too much time and investment. Fortunately, there are other ways these employers can help workers save for retirement.


Small businesses that can’t offer 401(k) plans may still be able to offer a payroll-deducted individual retirement account (IRA) program. For example, the SIMPLE IRA (Savings Incentive Match Plan for Employees) program lets smaller employers contribute to their employees’  traditional IRAs.

SIMPLE IRA programs often come with lower administrative costs than you see with a 401(k). As an added bonus, small employers get a tax credit to offset the costs of starting a SIMPLE IRA with auto-enrollment.

Another option for some employers is the SEP IRA (Simplified Employee Pension) program. This type of plan has fewer start-up and operating costs than most conventional employer-sponsored retirement plans.

With a SEP IRA, employers can skip contributions during years when business is down. On the flip side, employers may be able to contribute more than they would be allowed to with a 401(k) plan — up to 25% of an employee’s compensation or $66,000 in 2023, whichever is less.

In some cases, small employers can also participate in a Pooled Employer Plan. These plans let a group of employers work within a single plan that will take on most of the administrative burden.

More and more states are requiring employers to provide retirement savings plans. California companies with five or more employees now must offer a retirement plan or pay a fine of up to $500 per employee. At least a dozen states have similar requirements or are working to implement them. If you put together a plan for your employees now, you’ll be ready for these changing requirements.




Just offering a retirement plan (and a large enough paycheck to save from) isn’t enough to get employees on track for retirement. Many people were never taught how to make investments, how to be a good saver, or how to plan for their own financial futures.

This reality brings us to the other major way employers can help workers save for retirement: financial literacy workshops.

Financial literacy workshops can teach employees about a wide range of financial subjects. They can cover budgeting, investing, using credit effectively, preventing identity theft, financial planning, loan options, and more. If employees attend the workshops, they may be better equipped to work toward financial stability and retirement.

Most schools don’t require a financial literacy course, and many employees did not grow up in families who could teach them how money works. People who set out to teach themselves often feel overwhelmed by all conflicting advice from books, podcasts, and social media influencers. For these employees, a financial literacy workshop from a professional instructor might just be life-changing.




At LG Resources, we help employers set up great employee benefits packages. We can help with both retirement plans and financial literacy workshops.

Retirement plans can make a huge difference for retaining and recruiting employees. Our employee benefits concierge team can set your organization up with employered-sponsored plans, individual retirement accounts, and plans for self-employed individuals and small business owners.

Our on-site and remote financial literacy courses are led by financial instructors. We can help your employees learn strategies for greater financial wellness and chart a plan for the future.

In addition to retirement plans and financial literacy courses, we can also help with:

  • ERC tax credits
  • Voluntary benefits
  • Health savings programs
  • Employee debt solutions
  • Executive bonus plans
  • Key person insurance
  • Premium finance
  • Estate planning
  • Fitness benefits
  • And more!

Contact us today to start setting up an employee benefits program that will attract and retain high-caliber employees.


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