End-of-year checklist: Update your retirement contributions

Employees have until December 15 to participate in an open enrollment period for healthcare plans and other workplace benefits. Yet they may be overlooking a very important element of their holistic health. 

While 87% of employees believe they should review their retirement plans during open enrollment, less than half will actually take a look at their goals and make adjustments to their contributions, according to new data from financial services firm Corebridge Financial. Only a third of employees know if they're currently on track to meet their retirement goals. 

For employers, this could be a missed opportunity to get employees as engaged in their financial wellness as they're encouraged to be about their physical health, says Terri Fiedler, president of retirement services at Corebridge Financial. 

"If you're doing annual enrollment, a lot of times [employees] get the notice about your healthcare benefits, but they don't necessarily get notifications to take action on 401(k)s or defined contribution plans," Fiedler says. "When it's time to sign up for healthcare benefits, remind your employees that they should also revisit their defined contribution plan." 

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Depending on the plan sponsor an employer works with, they might offer important education about end-of-year updates employees should be making to their accounts. Reviewing their match, increasing the percentage of their salary they put towards their retirement plan, and reviewing asset allocations within the plans are important considerations to be making during this time. 

"If something has changed in an employee's life, their asset allocation could be wrong, or if they're using tools that say they're on track or not on track, maybe the portfolio needs to become more aggressive," Fiedler says. "During the enrollment period, some plans offer the opportunity to speak with a financial professional and other planning resources and tools that are available to engage employees in the retirement savings process and determine needed actions." 

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These benefits should be communicated to employees with the same effort they spend on healthcare offerings, Fiedler says. Making emails personalized can encourage a higher open rate by employees, giving them access and opportunity to engage. 

"It is so important to offer employees retirement education and planning resources that enable them to take actions, such as digital planning tools, webinars and workshops," she says. "Send targeted and personalized emails, maybe it's my age or personalized to my needs." 

The right efforts do pay off for employers and employees: Corebridge offers over 1,000 financial professionals that provide personalized education and guidance, and sees higher saving rates from those participants. 

"We have teams of professionals that focus on enrollment, education, financial guidance and wealth management, and those employees tend to save more than those who do not work with a financial professional," Fiedler says. "Financial education is bigger than the workplace, and employers are trying to be part of that solution."