A common goal that can be easily forgotten about is getting our retirement savings in better shape. Retirement accounts through our employer can be one of the most attractive way to save, and while employer sponsored plans have long been a main source of retirement income for many workers over time, the retirement landscape has shifted.
The early 1980’s saw a major increase in the shift away from defined benefit plans that relied mainly on employer contributions to defined contribution plans such as 401(k) and 403(b) plans that put more of the responsibility on individuals. Unfortunately, education on how best to use these plans was not always a part of the transition, and too many people did not have a good understanding of the important concepts that drive success. I believe this type of education should be mandatory and not left to elective choices of when, or if, they are offered.
Educate Your Participants
Fragasso Financial Advisors has been educating investors on the principles of retirement saving for over forty years. We began by offering seminars where we taught personal financial planning. It is our belief that investors who understand the basic concepts of saving and investing have a much better chance of achieving their long-term goals. We have built on and refined these seminars, tailoring them to needs of retirement plan participants.
As an investment fiduciary partner to our retirement plan clients, we provide annual and ongoing education to their employees, or participants. We want plan participants to be aware of the benefits of the plan and have the necessary knowledge to most effectively work toward their retirement goals. By reviewing plan reporting information, we can determine topics that can be addressed in group education meetings. We then continue to work with plan sponsors to make sure gaps in employee knowledge are incorporated into ongoing education. After the participant education meetings, time is made available for one-on-one consultations to discuss individual concerns or questions.
Customize the Content and Frequency
We do not have a “one size fits all” approach to employee education. Most workforces are diverse; employees are in different career stages, they have differing levels of experience with investing, and their needs change over time. We continually work with the plan sponsor to tailor an ongoing education program designed to address employees’ needs.
In both group and individual settings, we educate investors who are at the beginning of their careers, those who might only have enrollment related or general questions, and those with complex planning issues. We explain and encourage the use of planning tools available on the record keeper’s website that can help determine proper savings levels and appropriate asset allocation based on their unique situation and goals. Use of these tools is encouraged, as we believe addressing these two aspects of investing for retirement puts participants on the right path for success.
We find that keeping employees aware of the benefits and importance of the retirement plan is vital for participation and for individual investor outcomes. That said, if that message is oversaturated, it can easily be tuned out. Semiannual education meetings, we believe, strike the proper balance of awareness and opportunity for guidance without being too repetitive. Again, these meetings will be tailored to the needs of plan participants and preferences of the plan sponsor.
We’re here to help
Fragasso Financial Advisors has been educating investors on the principles of retirement saving for over forty years. We understand that concerns can arise throughout the year, and we don’t want employees to wait for a scheduled meeting to address those concerns. We encourage all participants to call Fragasso anytime they have a question on their plan, account, market performance or any other financial matter. Our standard is to return phone calls within twentyfour hours, preferably the same day. Call Us