Retirement planning: Credit unions can lead by example
“You need to save for retirement.”
How many times have you heard that, or said that or read that?
Retirement planning is one of those omnipresent topics in our industry, precisely because it is so important. And National Retirement Security Week (Oct. 15 – 21) is a timely reminder that smart, long-term retirement plans are essential to ensuring credit union members achieve financial security.
But what about those other important people in the credit union movement: us – credit union employees, partners and advocates? We require retirement planning support as much as anyone, and current statistics indicate that we are struggling.
As the retirement field continues to shift from employer-sponsored pensions to private 401(k) plans, the burden increasingly lies with individuals to have the knowledge, discipline and foresight to save enough for their golden years.
We’ve all heard the stats: 10,000 baby boomers are retiring every day. They’re looking at about 20 years of retired bliss, but they probably don’t have the funds to cover it. In fact, 38 percent of Americans don’t save anything for retirement, while 63 percent of retirees are dependent on Social Security, friends, relatives or charity1.
Not exactly the retirement we all dream about.
Consider the sobering statistic that nearly half of all Americans would struggle to pay a $400 emergency expense2. This means people you work with, sit next to and have lunch with on a daily basis are facing real financial hardship. It’s an uncomfortable irony that we spend our workdays focused on building members’ financial wellness, but can so easily overlook the financial health needs of our very own friends and coworkers.
As credit union leaders, we have a responsibility to help our employees take positive, meaningful steps toward financial success.
The first step is education. The National Credit Union Foundation’s Retirement Fair is one way to illuminate the financial realities of life-after-work for your employees.
Then, once we’ve engaged our employees in the retirement conversation, we need to keep them there. Use whatever tools and resources are available to inspire continued retirement planning and saving.
At CUNA Mutual Group, we encourage our employees and credit union employees on our retirement programs to use BenefitsForYou – a website designed to make retirement planning easy. It puts all your 401(k) information and documents into one place, alongside educational resources and a simple, adjustable graph that shows whether you’re on track to retire at your target age, with your target replacement income. You can easily add 401(k)s from previous employers, pension plans, and spouse benefits.
We do this because helping our employees build financial security is not just the smart thing to do; it’s the right thing. It’s a win-win. Employees that are more certain of their financial future will be more productive, have higher work satisfaction and deliver increased customer service. In fact, employees with financial stress are five times more likely (48% vs. 10%) to be distracted at work, and twice as likely to miss work because of personal financial issues (16% vs 8%)3.
But more importantly, as a proud member of the credit union movement, we support our employees in building their own financial security because we take seriously our core principle of putting people first.
Ultimately, we must always work to strengthen the financial health of our members and our communities – and that should start with our employees.
Sources:
- Statistic Brain, Retirement Statistics, Jan. 2016.
- The Washington Post, The Shocking Number of Americans who Can’t Cover a $400 Expense, May, 2016.
- PWC, Special Report: Financial Stress and the Bottom Line, 2017.
