Getting workers to appreciate their benefits isn't always easy. Part of the problem lies in the fact there's a reason most people aren't able to provide their own complex financial instruments and services. If they could, they wouldn't need to rely on employers and employee benefit specialists to provide them with coverage to keep themselves economically comfortable.
This becomes even more troubling when companies offer their staff members diverse arrays of benefits. Retirement savings accounts, for example, can be quite different from one another. These discrepancies can be quite subtle and don't always become obvious until a worker's plans for post-work life are thrown into disarray because of a small misunderstanding.
For example, 48 percent of employees ages 21 to 34 don't understand the difference between traditional IRAs and Roth IRAs. This might not seem like a significant problem, but there are meaningful discrepancies between the two. A regular IRA only requires taxes to be paid when funds are withdrawn before retirement. A Roth IRA features taxes that are paid before money is put away and is only available to workers making under a certain threshold of income.
Mistaking the two can harm a worker's ability to provide a comfortable retirement for herself. For instance, a staff member who intends to save a certain amount of money in a traditional IRA might be disappointed to find her employer only offers Roth IRAs and that the taxes on deposits in the account will be prohibitively expensive for her retirement plans.
Fortunately, you can protect your workers and put their minds at ease by helping them receive wisdom and knowledge from an employee benefit advisor. These professionals can both figure out which sort of retirement benefit is best for your workers' financial situations and can more importantly explain to them what these differences mean.
