How Voluntary Benefits Can Help with Retirement Planning

Quick look: When it comes to employee benefits, there’s been an increased focus on long-term care. Though 401(k)s are still a large piece of the retirement planning puzzle, raising awareness about voluntary benefits has become just as essential to boost savings confidence and employee satisfaction. 

Thanks to advanced access to well-rounded care and modern medicine people are living longer than past generations. But as healthcare costs continue to rise, long-term care has become a big part of the conversation. Employees are evaluating how they’ll be able to afford to maintain their health and well-being into their retirement years. 

Though financial savings are the immediate first thought when talking about retirement, brokers have seen an uptick in the request for voluntary benefits as well. To evolve retirement planning into a comprehensive care strategy, which involves physical, mental, and financial support, it’s beneficial to prioritize these areas of care when researching and offering new products. 

Fortunately, with the help of a professional employer organization (PEO) partner, brokers can provide clients with customized options and creative opportunities as voluntary benefit participation grows.

The state of financial saving for the future

Building financial security through a retirement savings plan is as crucial to employees as their current job compensation. However, the truth is a majority don’t feel they’ve saved enough to get through retirement. In fact, one survey finds 56% of Americans feel behind on their progress in saving.

Many face concerns about balancing retirement savings with the inflated cost of living and debt pay-offs. And when combined with the increasing cost and pressure of securing long-term care, it’s a challenging predicament, to say the least. According to the Genworth Cost of Care Survey, 7 out of 10 people over the age of 65 will require long-term care and spend $4,500 on average for the monthly cost of an assisted living facility. 

This problem has been recognized on a federal level with SECURE 2.0 legislation, which was created to encourage employee participation in 401(k) and other retirement savings plans. New provisions taking effect in 2024 involve student loan debt relief and emergency savings. There will be an opportunity to link payment options and employer-matching contributions to an employee’s 401(k) or other retirement savings plans.

Though this is significant progress toward securing employees’ financial futures, raising awareness about voluntary benefits helps clients and their employees feel better prepared for their future. 

Voluntary benefits complement traditional retirement plans

Retirement savings accounts are automatically expected as part of any compensation package. However, voluntary benefits, such as long-term care, also play an impactful role in retirement planning. Health and wellness benefits provide coverage, resources, and support often needed later in life as part of a complete retirement plan. A few offerings available are:

Critical illness insurance

Having additional healthcare coverage in the event of a critical illness helps to provide financial protection. Depending on the specific plan, this benefit may include heart attacks, strokes, Parkinson’s, and/or Alzheimer’s disease. With the rate of healthcare costs and medications trending upward, critical illness insurance is something employees are considering when planning for retirement. 

Cancer care

Health coverage for a cancer diagnosis is another critical factor to consider in terms of long-term care needs. As part of its HR and benefits solution, ExtensisHR offers a cancer-specific program. Cancer Guardian utilizes DNA technology and personalized support from cancer care resources to prevent, detect, and manage cancer.

The purpose is to provide an all-encompassing level of support of both medical and emotional care. Benefits available through this program include:

• Hereditary Risk Screening Test 
• Cancer Information Line
• Cancer Support Specialists
• On-Site Nurse Advocate

Employee assistance programs (EAPs)

EAPs support employees in resolving a wide range of health, social, and financial problems which may be affecting their work performance. There is free access to confidential short-term counseling, referrals, and financial and legal resources to support, educate, and engage employees.

Personalizing retirement planning with a PEO

Matching voluntary benefits to specific client needs requires ongoing communication about what’s most relevant to employees. With five generations making up the workplace, not everyone is on the same retirement path. Rather than administering a catch-all solution, effective retirement planning requires collaboration and engagement among brokers, clients, and their employees. 

Expanding benefit offerings is an important first step. However, to truly sustain value, there needs to be continuous education, tools, and tailored solutions as well. Brokers who work with a PEO partner expand their offerings and give clients the personalized attention they need to create a successful plan. This is achievable through:

Premium benefits at cost-effective rates

Small- and medium-sized businesses (SMBs) are pressured to keep pace with larger companies who can offer greater benefit options. Brokers immediately gain an advantage when connecting clients with a PEO partner like ExtensisHR who offers Fortune 500-level benefits at cost-competitive rates.

Tailored plans based on employee feedback

Voluntary benefits help to educate employees on retirement planning programs and provide general education about financial and long-term care availability. In addition, conducting employee surveys and providing various modes of communication is effective during enrollment time and throughout the year. It gives every person a voice and ensures equitable accessibility to available offerings. 

Integrated HR tasks and functionality 

With ExtensisHR’s proprietary HRIS technology, SMB leaders have control over HR tasks and management with accessibility from anywhere, at any time. Additionally, there is unified reporting that provides guidance regarding cost management, performance goals, and more, to adjust as needed for continued growth and success. 

People want more from their benefits as they look toward the future. Educating them on and expanding their benefit options can enhance their sense of security. By aligning physical, mental, and financial care needs with customized benefit solutions, it promotes a positive outlook with regard to retirement planning.

With the expertise and experience of a PEO partner, brokers can bridge the gap of services and support their clients’ needs.

Learn about how our team of HR experts can help you and your clients optimize long-term growth. Contact ExtensisHR today.