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How to Help Employees Make the Most of Their Retirement Accounts

Many employers offer 401(k) plans to help workers prepare for retirement without the added stress of opening an account independently. These employer-sponsored accounts are often an effective and uncomplicated initial step for individuals as they save for the future.

They’re also a popular option — and while it’s great to see many people opening and saving in 401(k)s, some of these folks have stopped exploring other types of investment accounts. 401(k)s are important, but other accounts can complement a person’s financial picture by adding more flexibility to their savings plan. It all depends on their situation.

In Good Company recognizes that with a little guidance, we can learn how to make the most out of the accounts we use or have yet to explore. In our pre-retirement workshops, financial professionals help show employees ways to balance the convenience of fantastic employer benefits, like 401(k) accounts, with the flexibility of more advanced financial tools they work with in private practice. In other words, a little financial education can go a long way.

Beyond the Basics: Introducing IRAs

Regularly saving in an employer-sponsored retirement plan can be a great place to start. But it may make sense to learn about the advantages of adding other types of accounts like Individual Retirement Accounts (IRAs) to your strategy.

This is where financial education really shines in an employer’s HR toolkit: By empowering employees to participate in financial literacy workshops, you can help them learn about financial tools included in — as well as outside of — their benefits package, in a complementary manner.

Here’s a taste of how learning about self-directed accounts like IRAs can complement participation in employer-sponsored plans:

Investment Options
401(k) accounts are frequently limited in their investment options. If purchasing individual stocks, ETFs or socially responsible funds interests you, then you may have to look elsewhere, depending on your employer’s plan. By opening an IRA, you may be more capable of finding investments that align more closely with your values and goals.

Greater Independence
Traditional and Roth IRAs are self-directed, meaning you have more control over the account. If your employer’s plan has restrictions like forbidding withdrawals while still employed, or not providing a Roth option, an IRA may provide some needed flexibility for your retirement plan.

Home Base
Many individuals have numerous 401(k) or 403(b) accounts scattered about from each time they changed jobs. This can leave one’s investment plan convoluted and difficult to manage. Having an IRA can provide a home base to combine all of your old employer-sponsored accounts to simplify your plan.

Next Steps
Be sure to talk with a financial professional before opening an IRA and/or transferring an old account into an IRA. Many employer plans offer great perks like loans, creditor protections and high contribution limits that you may not have with an IRA. Also, there are some income limits on IRAs that you don’t have to worry about when contributing to employer-sponsored plans. There are plenty of details you may want to explore depending on your situation before moving forward.

Getting Started

Since many employees can’t immediately identify a professional to consult with, attending a financial education workshop can be a solid first step. As retirement accounts can be quite complicated, we offer several workshops to approach this subject from different angles.

In our investing workshop, guests engage in group discussions and persona-based activities to determine which retirement accounts might be a better fit given certain situations. Does it make more sense for a 25-year-old free spirit who values travel and adventure to invest more of her money in a health savings account or Roth IRA? In Good Company workshops tackle situations like these with professionals that have plenty of knowledge to share. For a deeper look into our virtual and in-person classes, our course catalog offers plenty of details.

If you’re looking to support your employees with financial education that can amplify their benefits, there’s no need to wait. Our workshops are designed to strengthen confidence within any team. Get in touch with us today.

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