3 ways your boss may try to help you shore up your retirement savings this year

3 ways your boss may try to help you shore up your retirement savings this year

The pandemic has inflicted turmoil on many Americans, but it could also usher in change for employees, their benefits and their retirements — in a good way. 

Not all companies were able to withstand the challenges the coronavirus crisis brought. Some employers, especially small businesses, had to lay off or furlough their workers. Others had to pare down benefits, including suspending employer matches to retirement plans. Not all Americans had to raid their retirement accounts to fund emergency situations or pay the bills in between jobs, but the CARES Act did make it easier for people to access these accounts without penalty.

The crisis still has the potential to alter workers’ retirement paths as well as the Social Security they expect to get one day, studies have shown

Still, even in dark times, there’s a silver lining. The pandemic will change numerous aspects of society, including the way people communicate with one another, navigate the health care system and prepare for retirement. Top priorities for employees in the months following the pandemic, whether they have suffered because of the crisis or not, have included their employees’ welfare, said Jeanne Thompson, senior vice president of workplace consulting at Fidelity Investments. “A huge focus has been on employees’ safety, mental health and financial well-being,” she said. 

See: COVID-19 will change this about the way you get health care

Here are three trends to watch out for this year that could benefit you — and your retirement. 

Increased assistance for student loans

Many Americans are plagued by student loans, which can slow — or even prevent — them from completing other financial goals, such as buying a home and funding retirement. The country has amassed $1.7 trillion in student-loan debt. 

Employers have recognized this issue and are beginning to help their workers tackle it, with financial planning assistance as well as programs to make after-tax contributions to their loans, according to Fidelity Investments. Doing so would not only help them shrink their debt, but alleviate their budget to pay for other expenses and goals, Thompson said. These provisions are especially helpful to women and people of color, who are “increasingly impacted” by student debt, according to Fidelity Investments. “Student debt is not a direct retirement benefit but falls under financial wellness,” Thompson said. “It’s helping people get back on track so they can develop a longer-term nest egg.”

Companies are paying particular attention to personal finance in other ways too, including providing workers with resources on how to create and contribute to an emergency fund — something the pandemic has proven to be crucial. 

A greater focus on caregiving 

Caregivers already do a lot for their loved ones — physically, emotionally and financially — but more than a third of caregivers said their responsibilities have expanded since the pandemic began. People take on these roles to help their older family members, as well as their children, and sometimes leave the workforce, shift to part-time work or pay for many of their relatives’ expenses, which affects them financially in the short- and long-term. A reduction in wages, or time away from the labor market, could hinder their retirement savings as well as their future Social Security benefits. 

Companies are weighing in on this concern by providing paid leave for caregiving responsibilities, elder and child care and support groups for parents, Fidelity said. 

Also see: This overworked group is burning out from COVID-19: Family caregivers

Tweaks to provided retirement plans

Companies increasingly have been implementing auto-enrollment, which automatically places workers into employer-sponsored retirement plans, such as the 401(k). Some employers are also automatically escalating their employees’ contributions. There was a significant uptick in auto-enrollment (42%) and auto-escalation (19%) in 2019, according to the Society for Human Resource Management, but a modest increase for both provisions in 2020. More workplaces are looking ahead to 2021 to implement these provisions, Thompson said. 

More employers are also allowing for brokerage windows in their retirement plans, so that employees can select whatever investment options they want if it’s not a part of the plan’s offerings, Fidelity said. More than one in five Fidelity workplace savings plans have a brokerage window now, three times as many plans as in 2010, the firm said. 

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