Need a lift? A financial professional can help!

Skiing: the art of catching cold and going broke while rapidly heading nowhere at great personal risk. ~Author Unknown

Earlier this spring, I had an opportunity to take my first ski vacation in Colorado which, at the time, seemed like a great opportunity.  I mean, how could I pass up the opportunity to ski on freshly groomed trails during the day and soak away my aches and pains in the hot tubs at night?  Growing up in Iowa, we receive a fair amount of snow and cold weather, and it’s not the first time I’ve strapped on a pair of skis and sent myself screaming down a hill (they’re not much more than that in the Midwest) with little advance instruction or preparation.


In the weeks leading up to this trip I must have been told a half dozen times that skiing in Colorado was a whole lot harder than skiing in the Midwest – and boy were they right!  Never before have I been as intimidated by the runs (mostly green) and humiliated by kids no older than 10 racing by me with the occasional one stopping politely to ask if I was okay after I had taken a fall.  Looking back, I should have considered investing half a day on instruction with an instructor, but pride may have gotten in the way.

While skiing in Colorado and thinking about some of the challenges I had faced, it got me thinking about the job I do every day and how employees may feel when trying to plan for their own retirement and some of the choices they’re required to make as a new employee.  How much should I save and where should that money be invested are only the beginning.

In addition, it made me question how retirement planfinancial professionals, like ski instructors, could play a bigger role in helping employees understand the decisions that they should be making now so that they can be properly prepared for retirement.

Engage a financial professional

According to Principal Financial Group’s Q2 2013 Well-Being IndexSM survey, employees who work with a financial professional simply fare better.  Employees who work with financial professionals said:

  • They were significantly more prepared for a comfortable retirement (61 percent) compared to workers who do not use a financial professional (29 percent)
  • They made solid progress toward their long-term financial goals (74 percent)
  • They were more financially confident since they began working with a financial professional (73 percent)
  • They were extremely happy with their current financial well-being than employees who do not see a financial professional (54 percent compared to 29 percent)

How can financial professionals help?

Based on the above information, what should financial professional be doing more of now to help make sure employees are properly prepared for retirement?  In my experience, there are many things financial professional are currently doing and should be doing more of to help employees plan, but these three things stick out in my mind:

1. Attend (and lead) employee enrollment meetings to build and strengthen employee relationships

Financial professionals who attend employee enrollment meetings are more likely to understand the issues employees are facing and will be able to assist them in addressing the challenges they face.  Encourage employees to save early for retirement by setting a modest elective deferral contribution and educate them of the benefits offered by their employer’s retirement plan.

2. Encourage employees to rollover money from prior employer’s retirement plan to avoid leakage

Employees who have left employment with a prior employer that had a retirement plan are more likely to elect a cash-out distribution than roll those assets over to another employer’s retirement plan or IRA.  As tempting as it may be, encourage those employees to rollover those assets to their new employer’s retirement plan regardless of whether or not they’re currently eligible to participate.  Those employees will say thank-you later.

3. Review retirement readiness goals with the employer and assist in determining if employees are on track

Many employers are unfamiliar with how their plan stacks up in terms of making sure that employees are prepared for retirement.  Review these goals with your employer and encourage them to review replacement ratios to determine if employees are currently on track for retirement.  If you determine that retirement savings goals are falling short, you can encourage them to take steps to get them back on track.


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 While this communication may be used to promote or market a transaction or an idea that is discussed in the publication, it is intended to provide general information about the subject matter covered and is provided with the understanding that none of the member companies of The Principal are rendering legal, accounting, or tax advice. It is not a marketed opinion and may not be used to avoid penalties under the Internal Revenue Code. You should consult with appropriate counsel or other advisors on all matters pertaining to legal, tax, or accounting obligations and requirements.

Insurance products and plan administrative services are provided by Principal Life Insurance Company a member of the Principal Financial Group® (The Principal®), Des Moines, IA 50392