One Size Does Not Fit All

Do you occasionally laugh when you read a lable that says, "one size fits all"?  Really??  Part of the beauty of this world is that we are all very different and one size does not fit all.  An example of this can be seen in employee benefits and rewards such as an employer match.

An employer match is basically a form of compensation to employees, but it requires that the employee participate in the company's retirement plan to receive that form of compensation.  In this situation, the employer is generously helping their employees save for retirement.

What if saving for retirement is not a priority for every employee?  What if a group of employees are solely focused on reducing expensive debt, such as student loan debt, and paying down this debt does not leave any money to save for retirement.  Is saving for retirement more important that paying down expensive debt?

What if a group of employees have young children and they are focused on avoiding student loans by investing in a 529 college savings account?  This is still a form of savings, and it is focused on an event that has a shorter horizon than retirement.

What if a group of employees have a disability and are receiving government benefits such as SSI?  They cannot participate in the retirement plan and receive the match because it could disqualify them from receiving this government benefit.  Instead, they could direct savings to an ABLE (529A) account and have the match directed into that account.  This would allow them to continue to receive teh SSI benefts as well as the company match.

What if a group of employees have inadequate emergency savings?  The idea of having money go into a retirement saving account feels too permanent and illiquid, and if an unexpected event happened (car or furnace or other appliance breaks down), they would not have funds available to pay for it.

If an employer match is a form of compensation for loyal employees, why not allow them to choose where this compensation should go?  In doing so, employer are truly meeting their employees where they are in their personal financial journey.  This will make the reward even more tangible and appreciated, which can help attract and retain talented employees.

This is what we do at Thrive!