5 ways to help retirement participants navigate inflation and volatility

With turbulence in every corner of the world (including our wallets), the idea of financial resilience is especially important today. But between inflation and stock market volatility, retirement may feel even further away for many of us. In fact, half of worried retirees in a 2022 survey from the Employee Benefit Research Institute cited inflation as the key reason they felt less confident about living comfortably through retirement post-pandemic. 

Even under ideal conditions, retirement planning can be complex — which is why it is strategically important to collaborate with your 401(k) plan financial adviser on how to communicate through and help participants navigate challenging economic conditions like those we face today. 

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After all, since most Americans rely on the workplace for their retirement savings, employers are poised as an essential resource for helping people manage financial turbulence. So, how can you leverage your relationship with a 401(k) plan financial adviser to help your workplace retirement participants stay engaged with their plans even when worried about inflation and volatility? 

Managing through the ups and downs
When it comes to building a house, while you need detailed plans for the rooms, roof, walls, electricity and plumbing, the building truly begins with laying a foundation. Similarly, we all need a strong financial foundation to achieve any of our financial goals — especially retirement. It can be a challenge for some of your employees to keep up with building an adequate nest egg during volatility and inflation, but there is a lot your adviser can do to help. 

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Talk to your retirement plan adviser about how to educate 401(k) participants on financial essentials and connect them with additional resources. Ask about ways to help them find an achievable balance between their short-term needs and long-term retirement goals. 

Here are a five topics to cover with your adviser:

1. Connecting retirement plans to more holistic choices. Retirement doesn’t happen in a vacuum. All the pieces of our financial lives must work together, including budgeting, debt, emergency savings, understanding the basic principles of investing, asset allocation and rebalancing, and even equity compensation. Your 401(k) plan financial adviser is an important resource in learning how to help participants take advantage of 360-degree planning resources like financial coaching through your wellness offering. Lean on them for guidance on financial education and strategies to connect your retirement participants to additional benefits like financial wellness that supplement a competitive retirement package. For example, access to budgeting tools or a financial coach can be a lifeline when trying to stretch each dollar under volatile conditions. 

2. Put the workplace to work. In our recent workplace retirement study, 87% of plan sponsors said that when a financial adviser is offered with the workplace retirement plan, the company as a whole has better plan outcomes — including higher employee participation (86%) and more eligible employees staying on-track for retirement, with higher retirement savings. We see firsthand how financial advisers play a central and critical role in helping employees pursue their long-term investment and retirement goals, in turn helping employers attract and retain top talent. Access to financial advice and investment management through workplace benefits like your 401(k) can help your employees form a clearer understanding of their different investment choices and planning scenarios to provide greater peace of mind and a more long-term perspective. 

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3. Illuminate outside resources. Your financial adviser for your 401(k) plan can also shed light on how to help employees tap into key outside resources such as Medicare, Social Security and long-term-care insurance into their retirement planning — while remaining realistic about their overall savings needs. For example, the Senior Citizens League found that Social Security benefits have lost 40% of their buying power since 2000 due to inflation — so it’s important for your employees to understand how far they can expect these resources to stretch in their retirement years. And if your workplace benefits don’t include any life insurance or long-term-care insurance coverage, ask your adviser about the pros and cons of potential updates to your program.

4. Demystify your retirement plan. During market selloffs, a portfolio’s asset allocation often shifts as stocks sell off and bonds rally, and investors are sometimes shocked by the fluctuations. Your 401(k) plan financial adviser can serve as the go-to for answering your retirement plan participants’ questions around how market conditions and inflation are affecting their savings, the investments available through your retirement plan, and how to structure and manage their portfolio. Whatever they’ve amassed over the course of their career, they’ll need help interpreting their retirement assets amidst market moves and inflation. On-demand seminars, retirement newsletters and fact sheets, employee resource group events, guest speakers, enrollment drives — all of these can help your employees better interact with and understand their retirement plans. But a 401(k) plan financial adviser can offer more tailored education and support. 

5. Expand the team. Estate planning, taxes, and overall financial wellness are often overlooked in conversations around retirement, so ask your adviser how to position any additional education and financial wellness resources around these topics to help your employees protect their assets, prepare for the unexpected, and reduce unnecessary administrative expenses, taxes and family conflicts down the road. For example, it may help to encourage employees to connect with an accountant to assist them with planning and strategy from a tax perspective. 

Keeping a clear eye
Your employees will appreciate support from the workplace as they juggle their current financial needs with their long-term retirement planning in today’s economic climate. While it’s important to offer a competitive 401(k) or retirement plan, it’s also critical to accompany your plan with relevant financial education, guidance, and supplemental workplace benefits that can help empower your employees no matter what financial conditions they face. 

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Uncontrollable twists and turns in the economy will always play a part in our lives — and in our finances. Rocky times come and go. Working with a 401(k) plan financial adviser can help participants mitigate those rough patches and maximize the upswings.

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