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Retirement and Retention

By Joe Trybula, CFP®, CFPA®

June 4, 2019

width=400Do you want to gain a competitive advantage in recruiting, retaining, and rewarding employees?

You can, with a smart 401(k) plan design and an organized course of action. By offering employees an optimized 401(k) plan in plain language, you can gain a competitive advantage.

According to a recent Betterment for Business survey, approximately 70 percent of respondents described a good 401(k) plan as an important or very important consideration in a job offer, and 78 percent of respondents indicated that they deferred the amount to capture the full employer match.

This is an opportunity to set your company apart from the rest. By changing expectations and how you position your 401(k) plan to current and prospective employees, your company is provided an advantage in any labor market, and your company’s viability is strengthened.

How do you change the expectation? Simple—you change the conversation. As an example, you have a prospective employee named Sam, who is 25 years old and whom you are looking to pay $36,000 a year. When it comes time to make the benefit program offer, most companies communicate the benefit of the 401(k) program in some sort of match formula that most employees do not understand. It is typically communicated as, “We match 25 percent of the first 6 percent you contribute to the 401(k) plan.” That is, of course, if the company offers a match or chooses to highlight the program.

Whether a company match is offered or not, reframe the message to how the program benefits the prospective employee, thus changing the conversation and putting the focus on the prospective employee. Position the 401(k) program as the benefit it is by saying, “We offer a retirement savings account for our employees, and by participating in the program and taking full advantage of our employer contributions, you could accumulate assets of $15,723 after five years, $36,939 after 10 years, and $480,240 by the time you reach age 65.1 Our company match is free money that allows us to significantly increase the total amount you can put away toward your retirement. It is important to us, as an organization, to help provide our employees with the opportunity to have a successful retirement.” This is a format an employee can understand, and it provides the employee with a vision of his or her future and longevity with your organization.

Final Advice: Remember, all employees have an interest in accumulating assets, just as you do; very few have been shown how or have had it clearly explained to them to this point.

It’s no secret. A happy work environment equates to employee satisfaction and retention.

width=150Joe Trybula, CFP®, CFPA®, is vice president of Diversified Financial Advisors LLC and a registered investment advisor with more than 20 years of experience. He can be reached at 800-307-0376 or

Disclaimer: Investment advice offered through Diversified Financial Advisors LLC, a registered investment advisor. For plan sponsor use only, not for use with participants or the general public. This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.


  1. The hypothetical future value calculation of your 401(k) balance is calculated by accumulating the total contributions over the periods shown and assuming a 6 percent interest rate compounded annually. It illustrates what can happen when you start to save now, invest wisely, and take control of your retirement future. Your results will vary. Investments include risk, including possible loss of principal. No rate of return can be guaranteed