Are both your members and employees properly prepared for retirement? September isn’t normally the time to talk about savings plans, but a recently released set of guidelines from Fidelity Investments may help with planning your outreach efforts for the spring.
Many factors go into determining how much money your members and employees will need to live a comfortable lifestyle in their retirement: current and future income levels, stock market performance, likelihood of Social Security funds for the younger folk, desired retirement age, etc. Many people want to hear definitive goal for their nest egg: You’ll need $X to retire. This is nearly impossible, though, to communicate to large group of people – whether employees or members.
Fidelity’s release includes guidelines based on income multipliers, which are easy to understand and apply to many different demographics. For example, a chart of the figures indicates that a 40-year-old employee should have twice their current income levels held in retirement funds.
The Financial Industry Regulatory Authority (FINRA) reported last year that nearly 30% of workers don’t contribute enough to receive their full employer match. If your employees aren’t taking advantage of tax-deferred retirement accounts and potential employer matching funds, facts like these may grab their attention. New employees could receive similar guidance on retirement savings with their benefits information to encourage enrollment.
The guidelines based on income levels may also get members interested in how the credit unions’ savings products or investment services can help them reach their goals. Initiating front-line conversations and referring members to your investment services representatives increases the member relationship and can build fee income streams back to the credit union. Few credit unions need additional shares and deposits, but building relationships with members now can only benefit both the credit union and the member in the future.