Planning for Retirement? Start by Using the Right Health Benefits

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Executive Summary: Discover how you can help your employees better plan and save for retirement, including how to:

  • customize financial education around individual health needs.
  • improve health literacy around their benefits package so that they’re choosing the most cost-effective plan.
  • provide tools and resources, like HSAs that can help them spend and save more efficiently.

Since the start of the pandemic, Americans’ financial anxieties about retirement have increased. According to a 2022 Gallup poll, 63% of Americans are worried about having enough savings for retirement. This is the first time since 2016–when there was a significant stock market crash–that more than six in 10 people have been this concerned over the topic.

In saving for retirement, one consideration to keep in mind is that the cost of health care, as well as the need for it, will increase as you age. It’s not just about having money for expenses like housing, groceries and bills, but ensuring you have savings set aside for unexpected costs, like increased health care consumption. By planning ahead, you’ll be in the best position to handle the future.

Many people don’t realize that they can look to their health benefits to find ways to save long-term. As retirement concerns increase, let’s look at how you can leverage health literacy tactics and benefits solutions to help employees of all ages start saving and planning today.

Personalize financial education around employee health needs.

Helping your employees plan financially for the future requires an understanding of their individual needs and what stage of life they’re in. The health plan needs of your Gen Z employees are likely different from your Gen Xers, for example. Your LGBTQ+ and parent workforce’s needs can also be very nuanced.

Employers can help by offering opportunities throughout the year for your employees to schedule one-on-one meetings with their HR benefits or health plan representative and their 401K representative for a more personalized conversation of their goals. Providing resources, tools and support that personalize employees’ financial education to align with their goals and needs, like family planning and caregiving, can help them create a more financially secure future for themselves and their families.

Educate on health plan offerings.

When it comes to health coverage, almost half of employees admit they don’t understand their benefits. And 96% don’t understand the most basic health coverage terms. This lack of knowledge can often result in choosing more coverage than needed—spending money that otherwise could have gone toward retirement savings.

Help employees make informed decisions when choosing their health plan by providing training, communications and resources on benefits offered and what may best fit their needs. Provide side-by-side comparisons of each available health plan and consider holding virtual webinars with health plan or 401K representatives to share an overview of their offerings.

For eligible Harvard Pilgrim members, Decision Doc, powered by HYKE, simplifies the plan selection process with interactive, personalized decision support. Members can talk with someone at Decision Doc to determine which plan is the most cost-effective choice for themselves and their families.

Explain the value of savings tools, like HSAs.

Over 65% of Americans are confused about health savings accounts (HSAs). This can be a missed opportunity for employees to lower their health care costs today, which could add to their savings for the future. Help your employees understand how HSAs work by sharing some of the benefits:

  • HSA funds roll over year-after-year.
  • You don’t lose your HSA even if you retire or change jobs.
  • HSAs provide three different tax advantages: contributions are pre-tax, these contributions can be used tax-free for qualified expenses and HSA funds and investments accrue interest tax-free.

HSAs can be a powerful investment used toward health care expenses during retirement. If you aren’t already, consider offering plans with HSAs and contributing to your employees’ HSAs. During open enrollment, decision-support tools like MyHealthMath can also be a helpful resource for educating employees on the values of HSAs, and if one is right for them.

Help employees worry less about their future retirement by keeping them educated on health benefits savings today. This will make for a better future for them and, with less to worry about, a more productive employee for you. It’s a win-win.

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