Investing is an important but intimidating topic especially to those with limited experience. Many of your employees know that they should be investing for their futures but have no idea where to start.
I recall a story a friend of mine once told me about his first brush with investment advice. Steve had just graduated from college and really wanted to buy a new car. While starting work at his new job, he was filling out all the forms (this was still in the paper-form era) when the Human Resources Manager asked him about his plans for retirement. “Retirement?” my then twenty-two-year-old friend exclaimed. Steve just wanted to buy a new car. The HR Manager asked my friend if he was going to sign up for the company’s 401k program with a full match up to a 6% contribution level. Steve had no idea when the manager was talking about. “What’s a 401k?” he thought. He replied that he assumed the company’s pension plan would take care of him in retirement just like his dad’s company did. Sadly, the HR Manager replied that the company no longer offered a pension plan to new employees.
The HR Manager then challenged my friend to take some time and figure how much money it would take to retire. “But,” my friend replied, “I just want to buy a new car.” However, Steve went away, took a month, and figured out that it would take a lot of money to retire comfortably some 40-45 years down the road. He then signed up for the 401k plan, got the full match, and then began to research and find different ways to invest his money. My friend is now in his 50s and has commented to me that he now enjoys much more financial flexibility than he would have had he never had this early encounter with the HR Manager.
This anecdote highlights the struggle that young adults have with lack of knowledge and confidence when it comes to investing. Unfortunately, this struggle leads to indecision and an inability to get started. This paralysis allows other expenses to creep into an individual’s budget which further hamstrings one’s ability to create and execute a credible investment plan as adulthood progresses. Many people find themselves nearing retirement age without the funds necessary to live the post-work life of their dreams.
At the Foundation for Financial Wellness, we know that everyone’s knowledge and comfort level with investing is different, so we’ve created tools to be flexible and guide your employees into the areas that they need the most. Our Five Essentials Program starts at the beginning, complete with behaviors and psychology, and leads the user down the path to intentionally creating an investing plan that will lead to sustainable retirement and a lasting legacy.
If your company wants to take action and learn more about educational programs, certifications, or coaching for you and your employees, contact us at www.foundationforfinancialwellness.org. We are a not-for-profit entity simply looking to make a difference. Learn how to Handle Life (and your money) Better.