Back to school for retirement, virtually

Sean Jordan

By Sean Jordan
Sean Jordan is Head of Emerging Client Management for the Workplace Solutions unit of MassMutual.
Posted on Jun 10, 2020

No more pencils, no more books. No more teacher’s dirty looks.

This spring, 100 million students in grades kindergarten through senior high school were let out of school early due to the Coronavirus and efforts by states to enforce social distancing, Education Week reports.1 But the early dismissals have not stopped students’ from learning as virtual education has replaced classrooms in many districts. So much for skipping school for an extra two months.

At MassMutual, virtual education has been popular for years as workers participating in employer-sponsored savings plans regularly learn about retirement planning and other financial wellness topics online. In 2019, we engaged 15,000 plan participants in a variety of online courses and that number is expected to double in 2020.

While we have hosted onsite education at plan sponsors’ worksites, MassMutual has discovered that virtual sessions are actually more effective. Consider that the action rate for virtual education – meaning a participant signed up for the company’s retirement plan, started saving more or took other steps to enhance his or her retirement savings – was 47 percent in 2019 compared to 43 percent for onsite education. And our instructors don’t give anyone dirty looks!

Plan sponsors typically want to help participants plan and save for their future and MassMutual’s series of retirement planning workshops are designed to do just that. The goal is to educate and inspire workers to embrace their future and plan by making the most of their 401(k) or other retirement savings plan. Our workshops feature a comprehensive list of retirement- and investment-oriented topics, are designed to be engaging and flexible, and can be measured for effectiveness.

The programs can be conducted by MassMutual’s education specialists, who will consult the plan’s financial professional or even team up to conduct a joint session. Sometimes, a financial professional will present content provided by MassMutual.

It starts with relevant content. There is a wide selection of workshops created to address a range of needs, from novice investors to experienced savers who are nearing retirement:

  • Enrolling in the plan – Reviewing the advantages of a defined contribution plan, the reasons and mechanics of enrollment. Participants can sign up while the course is in session.
  • Reviewing the plan – Insights into the basics of investing, why it makes sense to save more, and making the most of online tools.
  • Explaining defined benefit plans – Diving into how pensions work, how benefits are calculated and what distribution options may be available depending upon an employer’s specific plan.
  • Approaching retirement – Envisioning retirement, determining income sources, and calculating how much savings and income is needed to retire.
  • Allocating assets – Determining each participant’s investment style, allocating assets and diversifying.

But one size never fits all when it comes to employee education. That’s why our core offerings can be enhanced and built upon to cover more specific retirement subjects, depending upon participants’ needs:

  • Budgeting – Helping participants better manage their money can enable them to find dollars to earmark for retirement saving.
  • Inflation – During the course of a 20- or even 30-year retirement, retiree’s purchasing power may continue to dwindle over the years. Keeping some money invested in the markets at older ages can help retirees keep up with inflation.
  • Tax incentives of 401(k)s – Earmarking pre-tax dollars can help reduce participants’ taxable income, making it more affordable to save. Savings grow tax-deferred until withdrawn, which can help participants’ nest eggs grow more quickly.
  • Employer match – Encourages employees to save enough to qualify for available matching contributions from their employer. Employees sometimes are unaware of matching contributions and thus leave thousands of dollars in “extra money” on the table.
  • Roth savings – Participants who are willing to invest after-tax dollars can reap the reward of tax-free income in retirement.
  • Consolidating retirement plans – In today’s highly mobile job market, it’s common for workers to have retirement savings plans with multiple employers. Consolidating those plans with a current employer has advantages.
  • Savings considerations for younger employees – Workers in their 20s and 30s have several decades before retirement, enabling them to put the power of compounding to work. Longer time horizons also enable younger workers to take and potentially benefit from more market risk as compared to workers who are closer to retirement.
  • Savings considerations for women – Saving for retirement can be a bigger challenge for women, especially if they take time off from careers to care for children or other family members. That can mean that women need to embrace different strategies to save for retirement.

These topics can be combined or customized for a specific employee population. MassMutual’s relationship managers, education specialists and plan consultants can help you determine what makes the most sense and customize a program for your company.

So put away the pencils and stow the books. With MassMutual’s virtual education courses, workers’ retirement never looked so good.

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