Survey reveals Baby Boomers’ need for strategic retirement planning

A report recently released by BMOW Wealth Management showed aging Americans have concerns with regard to retirement planning and the effects on their family and wealth.

The report, called The Aging Economy: Improving with Age, surveyed more than 500 Americans 55 and older and reviewed the benefits of an in-depth wealth plan to help manage the stressors many seniors feel throughout retirement.

“While Americans are fortunate to be living longer, extended retirement brings additional costs and challenges,” said Tania Slade, National Head of Wealth Planning, BMO Wealth Management (U.S.).

“It’s crucial that people approaching retirement work closely with financial planners, spouses, and family members to come up with a viable, long-term strategy that supports them throughout their elder years and enables them to leave the legacy they desire.”

As a result of the increased life expectancy among Americans, the average retirement period is now 18 years, and many boomers are remaining in the workforce longer to grow their retirement next egg, meet retirement and estate planning goals and stay active. In addition, more Boomers are thinking now more than ever about how they will live comfortably in the future.

According to the survey, Boomer’s top concerns about a prolonged retirement include quality of life and healthcare costs, followed by being a burden on family members and running out of money during retirement.

Additionally, spouses and partners can have differing opinions about their long-term financial goals. The biggest discrepancy most couples noted was when and how much to save for the future, followed by retirement goals and how personal assets and possessions should be distributed to heirs.

Lastly, respondents identified their most significant investment and retirement issues as a desire to maximize retirement income, fear of outliving their savings in retirement, and the impact of long-term care costs on personal finances.

 

 

 




Time to Invest in You: Ways to Make Your Retirement a Reality

By Rachel Barrow, AVP Marketing, Individual Markets, Guardian Life Insurance Co. of America®

Dreaming about retirement may bring to mind relaxation, travel, and leisure time. Many people find, though, that planning for it can be stressful – but it doesn’t have to be that way. If open enrollment time has you thinking about how you’ll fund your retirement, you’re not alone. A recent survey by the Employment Benefit Research Institute1 shows that retirees are less confident than they were last year that they will have enough money saved for basic expenses, health care, or long-term care.

How can you face the future with more confidence? Look for resources to help you chart this path. Turn to your current employer for help; Guardian’s 5th Annual Workplace Benefits Study,2 Small Business, Big Benefits, states that over 44 percent of small businesses are increasing employee financial education over the next five years to help employees make better benefits decisions. Or, make a plan that’s focused on what you feel will matter most to you in retirement (family, lifestyle, relationships, health, etc.), seek out the best retirement strategies and products and, most of all, invest in yourself. It can help you go a long way toward making your second act (retirement) a reality.

Plan with care

As you start considering your retirement plan, it helps to look at how certain financial products can help you reach your goals. Whether those products protect future income, help cover future care, protect your earning ability from the possibility of premature death, accidents, or long-term illness, or provide for market-related growth opportunities, having a well-rounded package of products may make a difference.

To create the best retirement strategy, you need to balance having the right products in place, while recognizing some of the issues you may encounter along the way. Keep these ideas in mind while you are planning your future:

  • Keep up with your defined contribution (DC) plan: Open enrollment is an excellent time to increase how much money you’re saving, but you can ordinarily do it anytime throughout the year (based on your plan’s provisions). Many retirement planners underestimate the amount they will need to maintain the standard of living they want. Remember to account for inflation, health care costs, and unexpected expenses you may encounter.
  • Keep a diversified investment portfolio: As you examine your investment choices during open enrollment, remember the benefits of a diversified selection of investments. Even if your investment choices get more conservative as retirement approaches, you may not want to avoid stocks entirely. After all, keeping pace with inflation can help your nest egg retain its purchasing power. See your financial advisor to discuss how you feel about risk and your retirement income goals.
  • Have realistic retirement income goals: The old rule of thumb is that you will need 80 percent of your annual pre-retirement income, because of the (assumed) reduced cost of living in retirement, including the possible elimination of mortgage payments. But when you factor in health care costs, dining out, travel, and pursuing other passions, this amount may not be enough for you. Take the time to do the math and don’t be shy to get help from a financial professional.

Explore your options and mind any gaps

After you do your calculations, if you find your projections mean you may be falling short of your retirement income goals, don’t despair. Whether you feel you’ll have a shortfall in your retirement budget or are just trying to find solid, reliable sources to pay future expenses, focusing on guaranteed monthly income can help.

Many experts agree. For instance, Robert Merton (MIT professor and co-recipient of the 1997 Nobel Memorial Prize in Economic Sciences) wrote in Harvard Business Review3 that people should focus their retirement planning on monthly income instead of trying to find a magic number of how much they’ll need in total retirement savings.

What are the sources of guaranteed income that can help you produce the monthly retirement income you’ll need? Some will be familiar to you; others may not be. But it’s worth taking a close look at guaranteed income, the products that provide it, and how they can be an essential source of monthly retirement income:

  • Social Security: Just about everyone knows about Social Security, but how much do you think you’ll receive? Visit the Social Security Administration’s Retirement Estimator4 to find out. When you see your estimated future benefit, keep in mind that Social Security generally only accounts for part of most people’s retirement income – and that your future benefits are not (at this point in time) guaranteed.
  • Company Pensions: If you’re lucky enough to work for an employer that offers a pension plan, be grateful. Once a major source of guaranteed retirement income, employer-sponsored pensions are not a common benefit offering today.
  • Bonds and CDs: These investments give predictable (if not absolutely guaranteed) returns, with possible tax advantages, and can help round out your investment portfolio. Their rates of return can be somewhat limited, however.
  • Annuities: By paying an insurance company a specified amount of money, you can receive regular payments for a set amount of time, or for life. There are many different types of annuities that can establish cash flow now (immediate annuities) or later (deferred annuities) – at fixed or variable interest rates.

Invest in yourself

Budgeting for your retirement can seem like a daunting task, but making a plan is the first step. Pause, build a checklist of tasks for yourself, and check off each one as you complete it. It also helps to consult a financial professional, who can help you identify your unique retirement vision – and the steps you can take to help yourself achieve it.

Each person’s plan will be different. The important thing is that you take the time to invest in your own future. You may find that it not only alleviates stress, but also helps you take the first step toward achieving the retirement of your dreams.

Rachel Barrow leads the Product Marketing team for Individual Markets at The Guardian Life Insurance Company of America®. She has been with Guardian since 2009 and in the insurance business for over 20 years. Her team produces educational tools and resources focused on strategies to help individuals, families and small business owners achieve financial security.

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1 Employee Benefit Research Institute (2018, April 24). 2018 Retirement Confidence Survey. Retrieved from: https://www.ebri.org/docs/default-source/rcs/1_2018rcs_report_v5mgachecked.pdf?sfvrsn=e2e9302f_2

2 5th Annual Workplace Benefits Study (2018, October 15), Small Business, Big Benefits. https://www.guardiananytime.com/gafd/wps/portal/fdhome/insights-perspectives/emerging-trends/small-business-benefits-study

3 Merton, Robert C. (2014, July-August). The Crisis in Retirement Planning. Retrieved from https://hbr.org/2014/07/the-crisis-in-retirement-planning

4 Social Security Administration. How the Retirement Estimator Works. Retrieved from https://www.ssa.gov/benefits/retirement/estimator.html




Why relying on SSDI is better than nothing, but far from optimal

By Ted Norwood, General Counsel and Director of Representation, Integrated Benefits, Inc.

According to the Council for Disability Awareness, half of those who don’t work for the government have some form of employer-paid disability insurance (short-term disability only, long-term disability only, or both STD and LTD). These benefits are important because 25 percent of today’s 20-year-olds will at some point miss a year or more of work due to medical problems.

For businesses, as companies become leaner, individual employees become more vital and more difficult to replace. Replacing an experienced employee is very expensive, and long term, losing employees is difficult.

Given that, an increasing number of employers recognize the value of employee well-being. In fact, many companies now recognize the value of caring for employees as people, not just assets.[1]

Providing private disability insurance benefits in the workplace is an important way to care for employee financial health. But, about half of workers in the private sector do not have these benefits. Instead, if they are unable to work for an extended period of time, they often must rely on the Social Security Administration’s Disability Income (SSDI) program—if they qualify—for income.

In this article, we will look at the advantages and disadvantages of the SSA’s disability program from an employer perspective. Since you have to eat your veggies before dessert, let’s start with the disadvantages of the SSDI program and then end on a high note.

Three Disadvantages of Relying on SSDI for Employee Disability Coverage

The three main disadvantages to relying on SSDI to provide disability insurance to your employees are the wait, the challenges, and the lack of good recovery resources.

The Wait

The wait time to receive Social Security disability payments is almost unconscionable. The average wait before your employee receives the first payment is 15 months. Many applicants wait two years or more.

During this long wait, employees relying on SSDI often have no income. Spouses may work, but even in the best cases, the lost income is often devastating. They may get food stamps or Medicaid in some places, but in others they may not. Even though the SSA does provide retroactive payments on its disability awards, the wait is so long that many claimants have lost their savings, liquidated retirement accounts, and have seen their personal relationships deteriorate.[2]

SSDI does help people, but the long wait creates problems for claimants. It is certainly not what a conscientious employer wants to see for their dedicated workers.

SSDI is Hard to Get

Qualification for SSDI is hard. Social Security does not offer an own-occupation definition of disability nor does it consider prior income.[3] For skilled workers, this makes qualification very difficult. In fact, most claimants need a lawyer to represent them during the application process. Without representation, the odds of receiving benefits are much lower.

The application process is often difficult to navigate and confusing. The SSA repeatedly requests the same information and requires completion of long forms. Given the high standard of disability, a misplaced word can hurt a claimant’s application, which already only has a one in three chance of receiving an award at the initial level.[4]

Not only does it take an incredibly long time to get benefits, it is also very difficult to qualify. Leaving your employees to rely on this Byzantine system is certainly not an advantage to a compassionate employer.

SSDI Lacks Rehabilitation Resources

SSDI has poor resources for vocational rehabilitation or job placement, and no resources at all for claimants during the wait for a decision. This makes it harder for people to recover and get back to work.

Because of the long wait, many claimants miss out on vital windows to improve their chances of recovery and return to work. By the time the SSA awards disability payments, many claims are permanent due to the effects of such a long layoff and the lack of rehabilitation resources.

Certainly, SSDI can provide income to your disabled employees, but relying on it leaves them with a long wait and long odds, making it less likely they will be able to rejoin your team or find alternative work.

SSDI is Not All Bad News for Employers

Although SSDI does not do much for employers on its own, it is certainly better than nothing. It does eventually provide Medicare and annual cost of living adjustments (COLAs) for disabled claimants.

Those are important benefits, as many employees lose their health insurance during the wait for SSDI. Annual COLAs help people with disabilities keep up with the economy. Every bit matters once workers are on a fixed income.

Despite its problems, the SSDI program is a successful program designed to help protect American workers. Still, there is one more major advantage SSDI provides to employers.

SSDI acts like a subsidy to group long-term disability insurance, making disability policies affordable and an excellent value.

Group long-term disability policies protect employees from the disadvantages of SSDI.[5]

  • These LTD policies usually start with an own-occupation period of two years, allowing the employee to receive benefits immediately.
  • Group LTD policies can be structured to pay higher benefits than SSDI does.
  • Group LTD policies have better opportunities to provide vocational rehabilitation and return to work services.
  • Plus, most insurers will provide a lawyer for claimants to assist with their SSDI applications.

Although claimants often cannot double dip LTD and SSDI, SSDI still provides them with health insurance and cost-of-living adjustments. These benefits are the real opportunity SSDI provides for employers.

[1] https://www.youtube.com/watch?v=or6YoXfHWSE

[2] https://www.nadr.org/news/377122/Four-Personal-Stories-Show-the-Effects-the-SSDI-Backlog-has-on-Peoples-Finances-and-Futures.htm

[3] https://www.ssa.gov/redbook/eng/definedisability.htm

[4] https://www.disabilitysecrets.com/advice.html

[5] https://www.consumerslife.com/EmployersCLIC/Products-for-Employers/Group-Long-Term-Disability-Insurance.aspx ; https://www.policygenius.com/disability-insurance/learn/long-term-disability-insurance-faqs/




Do your benefit priorities match your employers’?

By Diane Russell, Lincoln Financial

Your company’s benefit package is sending you a message about their priorities — and whether they are the same as yours. When companies get it right, it pays off in terms of your job satisfaction and desire to continue to work there. That’s because your employer is making it clear they are listening — and responding — to what you and your colleagues are saying you want and need the most.

What employees are concerned about

How can you effectively prioritize the value of your various benefits? The first step is to consider your own financial needs and goals, as well as your stage of life. Do you have a family? Are you their main source of income? Are you prepared if an illness or injury keeps you out of work for a period of time? When do you plan to retire?

In addition to your own specific needs, also consider the overall issues faced by today’s employees and how those issues may affect your benefit choices and work performance. We live in a time when financial stress is increasing, and health care is a significant contributor to that stress. In fact, 46 percent of employees fear unforeseen health expenses more than any other concern.1 And that financial stress can impact employees’ health care decisions: In a 2016 study, nearly 80 percent of emergency room physicians reported treating patients who have health insurance but nevertheless chose to delay or even forgo medical care due to costs.2 When employees do decide to seek the medical care they need, many may have to make difficult decisions about where that money will come from.

One notable trend shows that many Americans are funding everyday expenses by dipping into their retirement savings. In fact, 44 percent of workers surveyed said they’d most likely use money from their retirement accounts for expenses other than retirement, with 30 percent having already made one such withdrawal. 3 The top reason workers withdraw money from their retirement account is out-of-pocket medical expenses, with 28 percent of those surveyed withdrawing money for that reason. 4

 Not surprisingly, 42 percent of American workers are concerned about running out of money in retirement.5

Benefits make a difference

Employee benefits can help relieve financial stress. They are an important part of your total compensation package and can significantly influence the decision to stay at your current job or seek a new position.

Benefits attract6

57 percent of job candidates report benefits and perks are among their top considerations before accepting a job.

Benefits retain7

Nearly 80 percent of workers would prefer new or additional benefits to a pay increase.

What employees value

What benefits do your colleagues value and prioritize when it comes to choosing or staying with an employer? A recent Glassdoor Economic Research employee study shows there’s a clearly defined hierarchy. The study ranked 54 benefits by how much correlation they had with overall satisfaction with benefit packages — and the core benefits of health insurance, paid leave and retirement (including pensions and 401K plans) were all in the top five. These benefits, along with disability coverage, are the ones that can really make a difference to your financial security and future.

That’s because health benefits can be a prime protection against financial pitfalls such as high deductibles and coinsurance, as well as the loss of income that often comes with a prolonged recovery. Employees agree that this kind of protection can strongly contribute to a feeling of financial control and well-being, and view health insurance (97 percent) and disability insurance (93 percent) as important sources of protection and security for their families. They not only value this coverage, they expect employers to offer it, with two out of three employees expecting employers to provide disability insurance.8

Interconnected benefit solutions

These three key benefit areas — health insurance, retirement, and disability — are interconnected. They serve as the legs of a three-legged stool when it comes to financial wellness. If one leg is taken away, or is inadequate, the whole stool may collapse.

As we’ve noted, many workers will turn to their retirement accounts to pay for out-of-pocket medical expenses. Another reason for withdrawals is when they are out of work for a prolonged period due to a serious illness or injury. Your most important financial resource, after all, is your ability to earn an income. If your health insurance or disability coverages are inadequate, and you need to take out a 401K loan to pay medical expenses, the impact won’t just be on today’s finances, but also your long-term financial outlook.

How can your employer help?

Employers need to reach out to their employees — and truly listen to and incorporate their responses when choosing the tactics and tools that will become part of their financial wellness offerings. They need to recognize the importance employees place on the three-legged stool of health insurance, retirement and disability, and provide you with the information you need to thoroughly weigh your benefit options and make informed decisions.

Optimally, this could include providing concrete examples of how everyday health occurrences can affect your current and future financial picture, and how the benefits you are offered can help you reach your financial goals. Here are some questions you might want to consider and talk to your employer about:

1. Are you signing up for the same benefits every year because they are the best options — or because it’s what you’re used to?

When it comes to benefits through work, 87 percent of employees say they are more likely to enroll in benefits they are familiar with and are educated about.9 Although that’s understandable, that may mean you could be missing out on valuable benefits. Be sure to look at your employer’s full range of benefit options — not just the ones you already know well.

2. Have you had a major change in your life that could affect your benefit needs?

This is another aspect of not just doing what you’re used to – if you’ve recently gotten married, divorced, had a baby, or gotten a significant raise, your benefit needs and beneficiaries may need another close look.

3. Health insurance may pay most of your medical bills, but can you also take advantage of other options that protect you against loss of income during an illness or injury? Although 51 percent of employees say they have a plan in place for their financial future, only 26 percent have insurance that will cover them in case they can’t work due to illness or injury.10 Remember, using your retirement savings is a short-term solution with long-term negative results.

4. What will your out-of-pocket costs be — co-pays, deductibles, higher costs for out-of-network providers?

It may not be possible to know exactly what your expenses will be, but consider the possibilities and investigate whether there are coverages such as accident and critical illness that offer cash payments to help fill in the gap.

5. Are you taking full advantage of your company’s retirement match program?

Many companies offer a percentage match up to a certain contribution amount. Don’t leave free money on the table — make sure you’re contributing, at the minimum, enough to get your full company match.

6. Is your company’s benefit program on par with other companies in your industry?

Don’t compare apples to oranges — not every industry offers the same level of benefits. It’s important to have a sense of what the is norm in your industry and if your company meets or even beats it.

Conclusion

The benefits companies provide and the efforts they make to assure their employees are fully informed about their choices offer a view into how much a company values its employees. Companies that are truly trying to attract and retain talented employees listen to what their employees are saying, and know the triumvirate of key benefit solutions — health insurance, retirement, and disability — can make a crucial difference.

Sources

1 Lincoln Financial Group, “2017 Financial Focus Study.”

2 Brooke Murphy, “96% of Patients Don’t Understand Their Emergency Insurance Coverage: 6 findings from the ACEP,” Becker’s Hospital Review, https://www.beckershospitalreview.com/payer-issues/96-of-patients-don-t-understand-their-emergency-insurance-coverage-6- findings-from-the-acep.html, May 9, 2016.

3 PwC, “Employee Financial Wellness Survey,” https://www.pwc.com/us/en/industries/private-company-services/library/financial-well-being-retirement-survey.html, October 2018.

4 Transamerica Center for Retirement Studies. 2015 16th Annual Transamerica Retirement Survey.

5 See footnote 3.

6 Harris Poll for Glassdoor, December, 2015.

7 Glassdoor Employment Confidence Survey, October 2015.

8 Lincoln Financial Group “2017 Employee Benefits Study.”

9 See footnote 8.

10 See footnote 8.

 

 




How disability insurance can be part of your paid leave and absence management strategy

By Marjory Robertson, AVP & Senior Counsel and Abigail O’Connell, Senior Counsel, Sun Life Financial

When employees need to step away from work — whether to welcome a new child, care for a family member, or another life event — protecting their jobs and benefits, understanding their rights, knowing whether their employers will pay part or all of their absences, and meeting paperwork deadlines and other obligations is often overwhelming. If they work for an employer without a consolidated absence approach, they also will be required to contact separate entities for different benefits and entitlements. Workers may be calling their HR team to file their Family & Medical Leave Act requests, and contacting their insurance carriers to file claims for short-term disability benefits.

Absence can also be overwhelming for employers

Legal requirements regarding leaves of absence (paid and unpaid) and workplace accommodations are changing at breathtaking speed. Employers’ human resources staff do not have the time, personnel, or expertise to ensure they are complying with the various requirements of the FMLA, the Americans with Disabilities Act, and the increasing variety of federal, state, and local paid and unpaid leave laws.

Further, the consequences of noncompliance for employers are very serious, ranging from government investigations by the Equal Employment Opportunity Commission or the Department of Labor to individual lawsuits by employees.

More employers are choosing to outsource their leave management to their disability provider. In fact, according to a 2017 leave management survey by the Disability Management Employers Coalition, 88 percent of employers who outsource their leave management do so with their disability insurers. They have expert legal and compliance personnel and systems who help employers ensure compliance with this myriad of changing leave and accommodation laws. Moreover, insurance companies want to partner with employers to evaluate and handle complex leave and accommodation issues and challenges. Their knowledge, skills, systems, and staff help employees receive the benefits they need quickly, and prevent FMLA and ADA abuse, including the challenging management of intermittent FMLA leave.

Using one vendor for absence and disability can simplify absence for employees and employers

To streamline the employee and employer experience, many companies select one vendor to administer paid and unpaid leave, absence, and disability benefits. A consolidated approach enables both employees and HR managers to contact one entity for information about their rights and obligations concerning multiple benefits and entitlements, like short-term disability, FMLA, and ADA/ADAAA accommodations.

In many situations, both the FMLA and the employer’s STD policy may cover an employee’s absence, enabling the disability carrier to make determinations based on a single employee claim form. Employers and managers receive consolidated reporting showing the status, dates, and timelines for employee absence to support workforce planning.

A vendor can promote company offerings in a targeted manner to drive usage

With one vendor, employers can incorporate and administer company paid (and unpaid) leave plans and programs alongside absence management programs and disability insurance. For example, the vendor may highlight an aspect of the employer’s employee assistance program based upon the employee’s particular absence reason, or remind the employee of a duty to report to his or her supervisor based on the employer’s usual and customary call-out requirements. More and more employers are offering paid paternal and/or family leaves. Insurers can administer these leaves along with the unpaid statutory leaves and also ensure that employer-sponsored paid leaves are coordinated with the increasing number of state paid family and medical leave laws.

Consolidated administration drives efficiency

Through their disability insurance provider, the employer may gain efficiency by setting up a single-file feed and vendor agreement. The employer’s staff may also become more efficient by outsourcing absence administration. Additionally, using an outside administrator limits risk of exposure to employee personal health information Employees will appreciate not having to provide sensitive medical information to their manager or HR. The provider can become a trusted partner to provide collaborative and consultative guidance on a range of complex compliance and administrative issues.

Help is available

Disability insurance carriers have decades of experience in managing absences, accommodations, and claims related to an employee’s own medical conditions, and for other leave reasons authorized by law or by an employer-sponsored leave plan.

Insurance carriers hire expert claims, vocational, and legal staff who can properly evaluate eligibility for leave and benefits, and administer the claims and accommodations in a seamless and integrated manner that best serves employers and employees alike.

Disability carriers offer client-friendly services, including timely processing of claims for leave and/or disability, integrated management of leave and disability claims, detailed reporting on leave and disability incidence rate, and timely and helpful communications with both the employer and affected employees.

Insurers have made – and will continue to make – substantial investments in legally-compliant claims and leave technology to meet evolving needs. They also maintain strict data privacy and cyber security standards.

Engage your disability provider for help with your absence and leave management policies. From providing support tools to navigating the nuances of leave protocols and maintaining compliance, your insurer can support you and your employees throughout their leave duration.

For more on paid leave and your paid leave strategy, tune into the CDA podcast, with Carol Harnett, Abigail O’Connell and Marjory Robertson.




Selecting benefits and insurance products that make sense for you

By Carol Harnett, President, Council for Disability Awareness

Note: An earlier version of this post appeared in Carol Harnett’s employee benefits column for Human Resource Executive.

You don’t know me, but I’m someone people have come to trust when they want to have a conversation about employee benefits. I stand to neither gain nor lose anything based on the choices you will make during your annual benefits enrollment period. Except for this: Based upon my life experiences, I’d like to see you make the best choices you can.

It’s challenging for your employer to provide you with the types of suggestions I’m going to make. This is largely based on the fact your human resource leaders can’t give you direct advice.

There is one key assessment I believe is important to make when choosing your benefits, and that is how to understand risk.

I spent the first 10 years of my career training elite athletes who “sneer at risk.” They push themselves to the edge of what their bodies can do and return every day to do that again and again – even after experiencing major injuries. They, their significant others or their parents also go to considerable expense to make certain they receive the best training, medical care and rehabilitation available.

The rest of my career has revolved around how to get people to the best quality healthcare – both to treat and prevent injuries, illnesses, accidents, temporary and permanent disabilities, and more minor health conditions such as pregnancies, bad backs and torn-up knees. As a result, I’ve developed a contact list of medical specialists who make a difference in helping people recover in a way that, sometimes, makes a life-altering difference.

Here’s one of the things that’s been frustrating the heck out of me the last few years. I’ll receive a phone call from a friend or acquaintance seeking a referral to a physician or healthcare provider. Very often I know someone who could help them – and here’s where the “but” comes in. This person can’t see this individual because they selected a health plan that limited their provider and medical center choices. At the time, it seemed like a good call. Limited network –and high-deductible – plans are more affordable.

I’d suggest that the first question you need to answer when assessing your health plan benefit selection is, if you or your loved ones needed to see the best healthcare provider, would you want that choice available to you? There is no shame in saying “no.” You might have to travel to see this person or go to that center of excellence, and it’s simply something you know you couldn’t or wouldn’t do. Understand that part of yourself now, before you select your health plan.

The other thing that worries me when people are making their benefits choices is they don’t think about if they can afford to be out of work for a period of time. The reason? It comes down again to how we assess our risks. Most of us don’t think anything will happen to us, so we don’t worry that we won’t be able to work for a period of time. Or, we believe we’ll have enough vacation time to cover an unpaid absence. Or, we think our parents or friends will loan us money.

Let me give you a snippet from my own life. During my working years, I’ve had two mountain-biking accidents that placed me on the disabled list, plus two concussions, two stress fractures, two broken toes, three episodes of back pain and a torn MCL. You may call me unlucky; I will tell you I live life off the sidelines. And so do most of you – whether you realize it or not.

So, first, make certain you understand your employer’s paid-time-off or vacation/sick time policies. This will give you good information about how vulnerable you might be financially if you leave work to have a child, or to repair your bunions, or take care of a sprained back, knee or shoulder – never mind if something more complicated happens.

My recommendation to you will always be to take advantage of your employer’s short- and/or long-term disability insurance policies. They are inexpensive and cost-effective ways to make certain you can afford to be out of work (and help you pay for associated costs such as money toward your high-deductible, co-pay or co-insurance).

Once you’ve consciously checked the boxes on the two things people who work tell me are most important to them – their health and their income – take a serious look at other benefits associated with an income stream such as your retirement plan. Make certain you know if and when you are eligible to receive retirement income from your employer, and how you can contribute the most money possible toward retirement programs such as 401(k) and 403(b) programs. Just as none of us think we’ll ever become ill, injured or experience an accident, we also think retirement is a far-away concept. Make certain to at least make a start with contributions.

What about the rest of your employee benefits options? Trust me, there are some wonderful benefits out there. If you have children, dental and vision insurance may be high on your priority list. But, before making those selections before the ones described above, make certain you understand the benefits and limitations to these policies. You may find there is an annual or a lifetime cap on benefits that doesn’t make these choices a good investment for you.

The bottom line for me every year? I consciously make certain I have the best help available to me through my benefits selections if something were to happen to my health or my income. And then I make sure I can retire from this part of my working life at a point of my choosing. I wish you the same.




Beyond medical: How supplemental benefits help attract and retain talent

By Phil Bruen, Vice President, Group Life and Disability Products, MetLife

As the annual enrollment period takes place in workplaces around the United States, human resources teams and employees have benefits on their minds. During this time, it’s important for employers to educate their workforces on how the benefits they provide can help workers achieve their short- and long-term financial goals.

To do this, employees should use the information their company provides related to benefits and also seek guidance from those they trust most. Doing so, even more so than a major life event, can cause individuals to not just evaluate, but act on benefits that meet their needs.

Employers who are competing for the best talent find that providing benefits to support the financial well-being of their workforce is necessary. According to MetLife’s 16th Annual Employee Benefit Trends Study (EBTS), less than half of workers believe their employer understands their personal financial pressures.

The benefits offered to employees during their annual enrollment period go well beyond basic health insurance. Products such as dental and vision insurance, accident and critical illness coverage, and disability insurance provide additional financial support for costs beyond what medical insurance covers. Workers need to view all employee benefits as a critically important part of their health and financial wellbeing. Their benefits package is necessary to protect employees’ life goals, such as purchasing a home or sending children to college.

Why peace of mind matters

The recent MetLife study revealed that employees use their benefits to fulfill a need greater than a visit to the dentist or a more affordable way to get glasses. On the whole, today’s workforce relies on their benefits as a financial safety net—benefits give them peace of mind.

For example, 71 percent of employees say their benefits help them worry less about unexpected financial or health issues. Additionally, 65 percent say their non-medical benefits help limit their out of pocket medical expenses. Understanding these deeper advantages of benefits helps HR leaders serve employees better. It also pays off for companies as well as our research shows that benefits increase employee loyalty, engagement and even productivity.

But for many companies, the big question is how to offer more benefits without incurring outsized expenses. The answer rests in creating options for employees to customize their benefit offerings. The good news? Employees are ready to help, since 60 percent said they’d like their employer to offer a wider array of benefits that they can choose to purchase.

Getting beyond medical

When you think outside of the traditional health insurance box, some of the most important and sought after benefits fall into these three categories:

1. Disability insurance and income replacement. More than one in four adults who are currently 20-years-old can expect to be out of work for at least a year because of a disabling condition before they retire.[1] And yet less than half of Americans report they have enough savings to cover even three months of their living expenses.[2] Providing an option for short- and long-term disability insurance offers employees a simple way to keep unexpected events from turning into financial disasters.

2. Supplemental health benefits. Today’s employees want and need a solid health insurance plan. But for most individuals and families, that’s only a component of their overall healthcare. For example, 53 percent of employees consider dental insurance a “must-have,” and 37 percent say the same about vision care. Other key offerings that employers can consider include hospital indemnity, critical illness, and accident insurance, all of which supplement health plans, and provide employees with additional financial resources when they may need them most.

3. Retirement and financial wellness. Nearly three-quarters of employees report that saving for retirement is a priority—and nearly half say they’re already concerned about outliving their savings, according to the 2018 MetLife research. Traditional employer-sponsored retirement plans certainly provide the financial security and savings that employees want. But additional benefits such as lifetime income solutions, life insurance products and financial planning, and education services work to strengthen overall benefit plans and give workers additional ways to prepare for retirement.

In an increasingly competitive job market, employee benefits truly help elevate companies in the minds of their current employees—as well as the people businesses want to attract and retain. As HR executives find creative ways to build out their benefits, they also prepare their businesses and workforce for a better future.

[1] Disability Statistics, The Council for Disability Awareness, http://disabilitycanhappen.org/overview/ accessed September, 2018

[2] Chances of a Disability, Ibid, The Council for Disability Awareness, http://disabilitycanhappen.org/disability-statistic/ updated March 28, 2018

Looking for more information on supplemental benefits? Join Phil Bruen and Carol Harnett as they discuss consumer strategies this open enrollment season on the CDA’s BlogTalkRadio.




How to upgrade your workplace on-boarding for Gen Z employees

A smooth on-boarding process is a must for today’s employees; after all, you want their first days to be inviting, and you want them to understand the ins and outs of your workplace. That’s because you have to make sure your employees are engaged right from the start, given today’s often fickle workforce.

Although most on-boarding best practices work for all generations, there are some specific actions you might want to take to reach your newest Gen Z employees that will capture their attention and underscore the importance of your programs, from benefits to corporate best practices.

Start wooing them from the day you extend the offer.

There’s an unfortunate new trend going on in workplaces, and that’s candidates “ghosting” their new employer. In other words, they’ve gone through all the trouble of interviewing and being hired, and then they just don’t show up on the first day…leaving you with a void and that sinking feeling you have to go back to the drawing board. One way to avoid this is to stay in close touch from the minute you extend the offer, even if there’s a brief lag until their start day. Send them emails with some details on the company culture or to introduce them to team members – anything that will help ensure they feel the love right up until they show up for the first day.

Create “snackable content.”

Gen Z is much maligned for their short attention span, but it’s not entirely their fault. After all the world has sped up, and they have always been used to a quicker pace – their TV shows have even been faster-paced. But the truth is, they are less likely to read through lengthy, fact-packed documents. If you truly want to retain their interest, make the content short and sweet so that they can digest it in short sessions as their time allows.

Focus on culture and transparency.

Gen Z cares about the culture of the workplace they are joining; but it’s not just about Ping-Pong tables and the other trappings that many “cool” workplaces try to assume. They want to be sure that their employer is walking the talk in regards to corporate social responsibility. Companies can help cultivate their loyalty through letting Gen Z employees know from the start what your company does to embrace a culture that is good for the environment, both the working environment they encounter every day and the larger global environment that they care about.

As consulting firm Deloitte explains in its report “Generation Z Enters the Workforce,” “Major consumer brands have found they are better able to build customer loyalty through transparency. For example, Patagonia, an outdoor clothing company, has made its supply chain more transparent via the Footprint Chronicles to demonstrate alignment with its core values of sustainability and environmental stewardship. As employees begin to expect similar norms for their employment brands, the need for transparency will likely only increase.”

Cater to their information on-demand expectation.

Remember that this is the generation that has always had a “computer” in their pocket where they can immediately get the answer to any question. Make sure your intranet is intuitive so that new employees can easily find the answers to questions they have about benefits like disability insurance or retirement plans via a simple search that they can access from any device.

Use images to explain more involved concepts.

Gen Z is very visually oriented, so a picture can be worth even more than 1,000 words. Redeploy your employee training manuals into more visual options, from short videos to infographics that Gen Z workers can understand at a glance. If there is a more involved step in a process, such as how to sign up for benefits, create a short video tutorial. This is the YouTube generation after all.

Try gamification as a strategy.

Turning employee onboarding into a game isn’t just a smart strategy to keep them entertained – it helps with retention, too. And while it works for every generation – most of us tend to zone out when faced with too many words on a page — it’s especially important for Gen Z, who were raised on video games and appreciate being rewarded when they master something. Create quizzes that unlock fun secret games or allow them to level up by answering questions correctly.

As you incorporate multiple generations into the workplace, it’s smart to consider how all your communications strategies can be upgraded. Reaching Gen Z through engaging onboarding is one of the best ways to start off on the right foot.

 




What makes a millennial-friendly workplace?

Move over, foosball table and bean bag chairs. If your organization’s goal is to attract the next generation of workers – and it better be, given the fact that millennials are the largest generation in the workforce today, reports the Pew Research Center – you want to make sure you’ve designed a workplace that features the attributes they covet.

Of course, the good news is that the elements that make a workplace friendly to millennials actually will attract all generations; after all at our core most of us want the same things.

But the millennial generation isn’t shy about expressing their preferences, so here are some research-backed suggestions for creating the ultimate millennial-friendly workplace.

Millennials want: Training and development

The skills shortage is real, and millennials want to make sure that their abilities are keeping pace with today’s new workplace and its focus on ever-evolving expectations. In fact, nearly 90 percent of millennials say that “professional or career growth and development opportunities” is a key factor in their job satisfaction, finds a Gallup poll – and that’s surely one reason why more than three-quarters of companies are offering professional development opportunities as a way to retain employees, finds a survey by Challenger, Gray & Christmas.

Millennials want: Feedback

Forget the annual review. “Why look in the rear-view mirror when you can be looking toward the future?” millennials wonder. In fact, nearly three-quarters of those under age 30 said they that would prefer feedback either weekly or monthly, finds a PwC survey. And that’s a bonus for everyone because it allows employees to make small tweaks to their performance on an ongoing basis, rather than waiting for a deluge of information, many of which refers to incidents or behaviors that may have happened a long time ago.

Millennials want: Top-notch technology

You better ditch those balky workstations and outdated pagers: Close to half (42 percent) of millennials say they would quit a job if they had to work with substandard tech, and an overwhelming 81 percent said that the available workplace technology was a consideration when contemplating a job offer, finds “The Future Workforce” study.

Millennial want: A workplace that lives its values

In one study reported by Glassdoor, employees named “culture and values” as the No. 1 workplace factor that matters to them most. Today’s younger generations are finely tuned into corporate social responsibility (CSR), and how companies behave, but the important thing to remember anymore is that they won’t just take your word for it: They are going to rely on their own research to find the facts. In fact, the Cone Communications CSR study finds that more than three-quarters of millennials do research to make sure a company is authentic in what it claims about environmental or social issues. While the study primarily pertained to consumers’ purchasing behavior, it stands to reason they will be equally diligent about sussing out the facts before taking a job.

Millennials want: Work/life balance

It’s almost become a cliché, but millennials crave their free time. In fact, flexibility is incredibly important to them as they create a balance that works for them. And while that mean ducking out for a spin class at noon or leaving early to take advantage of great weather for a hike, it also probably means they are answering emails on the weekend. Offering them the flexibility to make their own hours (within reason, of course, if it fits with your industry) can make a huge difference in their happiness in the workplace: An environment of flexibility encourages a positive impact on overall wellbeing, health and happiness, say 82 percent, and 81 percent also said it made them more productive, finds the 2017 Deloitte Millennial Survey.

Millennials want: A cool workplace

Ah, yes, back to those foosball tables and beanbags. Because, as it happens, millennials do care about their work environment. Turns out that 70 percent of millennials choose their jobs based on the office space, finds the Capital One’s Work Environment Survey. The good news? The most-desired workplace design element is natural light. So let the sunshine in.




Study shows LGBTQ Americans in need of retirement strategy guidance

A recent study from Massachusetts Mutual Life Insurance Co. (MassMutual) revealed lesbian, gay, bisexual, transgender, queer or questioning (LGBTQ) Americans say they want to preserve their retirement savings but tend to take bigger risks when it comes to investing.

Forty-two percent of LGBTQ retirees and pre-retirees said the should become more conservative with their money as they come closer to retirement, as opposed to 28 percent who said they prefer a more aggressive investment approach.

However, 65 percent of those respondents say their investment strategy is actually more mixed, rather than conservative, compared to 52 percent of the general population — 31 percent of respondents admitted they could be taking more risks than they should be, compared to 22 percent of other retirees and pre-retirees.

“MassMutual’s study shows that many LGBTQ retirees and pre-retirees may benefit from consulting a financial advisor about their retirement investment goals, something less than half currently do, and may benefit from help leading into retirement and securing their finances through retirement,” said Catherine Cannon, Head of Personal Markets at MassMutual.

“Of those respondents in our study who do work with a financial advisor, six in 10 say their advisor has encouraged them to change their investment mix and 87 percent of those folks were advised to become more conservative as they enter retirement.”

Both the general population and LGBTQ retirees expect their retirement savings to last 25 years, however overall, LGBTQ retirees plan to retire later than the general population. In addition, the same respondents said they expect their retirement income will last as long as they need, which is two years fewer than the general population.

LGBTQ retirees also expressed more confidence than the general population that they will be financially prepared for retirement. However, despite this confidence, stock market volatility and downturn in the stick market are worrisome for the community as they approach retirement. About 75 percent of respondents expressed this concern, with 27 percent say they are “very concerned.”

72 percent of the general population expressed concern with regard to market volatility, while 21 percent said they are “very concerned.”

According to the study, LGBTQ respondents show greater comfort in taking investment risk, with just 20 percent willing to accept “below average” or “low investment returns” in exchange for greater safety. Overall, respondents seem to seek a balance between growth and preservation.

“One strategy that may help some LGBTQ retirement savers balance investment goals such as growth and safety is the use of target date funds (TDFs) when available through their employer’s 401(k) or other retirement savings plan,” Cannon said.

“TDFs automatically reallocate retirement savings between equities and fixed-income, gradually growing more conservative as the investor approaches and enters retirement. Some newer TDFs also are more personalized to investor’s individual needs, including a greater focus on managing assets in accordance with an investor’s individual risk tolerance.”