The workplace can have a positive influence on how workers manage their money. To help your employees maintain good financial health, use these tips to support good saving and investing habits.
1. Add an emergency fund option.Allow employees to have a portion of their paycheck directly deposited into an account they can use as an emergency fund. Having an emergency fund helps them avoid the temptation of using retirement savings to pay for an unexpected expense.
2. Offer a Health Savings Account (HSA).Medical expenses can be a significant financial setback. With an HSA, individuals set aside money for health care expenses and get tax benefits. Funds that aren’t spent roll over to the next year. The individual needs to be enrolled in a high deductible health plan to participate. If you offer this option, educate employees on contribution limits as well as tax advantages of the account.
3. Offer a Flexible Spending Account (FSA).If an HSA isn’t an option for your workers, employees on your health plan may be able to set up an FSA to cover copayments, deductibles, and other health care costs. There are also tax advantages. Although there are contribution limits, an FSA can help employees budget for medical bills. If you offer this option, make sure employees understand the parameters.
4. Auto-enroll in retirement benefits.Retirement plans help employees establish a secure financial future and offer tax advantages. Participation increases when workers are automatically enrolled. With automatic enrollment, money is deducted from an eligible employee’s paycheck and put into a retirement account. Employees can opt out or change the amount deducted. The Internal Revenue Service (IRS) has information on retirement plans and setting up an automatic enrollment arrangement.
5. Make it easy.The easier it is for employees to enroll in a financial benefit you offer, the more likely they are to take advantage of it. Walk through the enrollment process yourself to make sure everything makes sense. Eliminate steps that aren’t needed, and don’t use financial jargon that might confuse employees.
6. Communicate.Don’t share financial benefit information only during new hire orientation. Use emails, text messages, your company intranet, and posters to provide regular updates about the financial benefits your company offers.
7. Provide financial education.This month’s LivingRight bulletin, bonus article, and activity are filled with financial tips for your workers. Also, work with your 401(k) provider, a local nonprofit, or a financial services company to provide additional materials and set up financial workshops for employees. Information is also available online from the Consumer Financial Protection Bureau.
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