Financial advice often focuses on securing one’s retirement fund before retirement, but what about after? Is there an adequate focus on covering all bases, including proper money management and how best to withdraw funds? Upon the conclusion of The Plan Sponsor University (TPSU) Fiduciary Education Program held at The University of Georgia, Founder and CEO Fred Barstein spoke with Carol Swanson, Human Resources Director at Winter Construction, an organization that employs around 300 people. Carol explained that their company noticed a lack of support for retirees to help with money management after retirement. This prompted Carol’s organization to make available to their employees an income replacement program which offers employees a steady stream of monthly income following retirement. Carol noted that their organization has had much success with the program with 80% of their employees utilizing the program after retirement, thus helping to encourage proper money management. In sum, income replacement programs are a great way to help workers manage their funds well not just in the journey to retirement, but for life after. Watch the video to learn more.
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Fred Barstein:
Greetings and welcome to 401KTV. This is Fred Barstein, CEO and founder of the Plan Sponsor University at the University of Georgia, their Buckhead campus, where we just completed a very successful program. I’m here with Carol. Carol, welcome to our program.
Carol Swanson:
Thank you so much for having me.
Fred Barstein:
Okay if we ask you a few questions?
Carol Swanson:
Absolutely.
Fred Barstein:
Okay. Before we do, tell our audience a little bit about yourself.
Carol Swanson:
I’m Carol Swanson. I’m the HR Director for Winter Construction. We’re a 300 people organization. We do general construction in Atlanta, Georgia.
Fred Barstein:
Very good. So one of the things you said you make available, which I was very interested in, is an income replacement program. Why did you do it?
Carol Swanson:
Well, we found that our employees are pretty much on autopilot with our 401k. We do target date funds, we auto enroll employees and we do all of this when they’re in the program, but we don’t have a program for when they retire or go out of the program. And so we looked at that and we found that people were taking money out at an alarming rate because they don’t know how to utilize that program. So we went to Fidelity, we were thinking annuities, and they said, Well, we have a program that offers a little bit more flexibility, a little bit less guarantee. But what it does is it offers you a steady stream of monthly income systematic withdrawals. And with the Fidelity program, the goal is you give them a timeline and you can have it go down to zero, use a hundred percent of your funds. But again, it’s over time and it’s spaced. If something arises, a need, you still have the flexibility to change that.
Fred Barstein:
And are people happy with that program?
Carol Swanson:
Very happy. It’s been a very successful program. We’ve had about 80% of our retirees utilize that program.
Fred Barstein:
Great. The final question, the program, how was it and a couple things you might have learned today?
Carol Swanson:
As I said before, I am a repeat attendee. I absolutely love this program. Every time I come, I learn something new. I get a new takeaway. Either new innovations, new ways to be compliant, new ideas, stretch funds, different things that help me create a better program that maximizes our employees potential savings. And I couldn’t do that without… We started an emergency fund, thanks to you. We have increased our match thanks to you. So I learn so much every time I’m here.
Fred Barstein:
Great. Well, we love having you.
Carol Swanson:
Thank you.
Fred Barstein:
Always welcome back, as are you, for our programs. Thanks for your time.
Carol Swanson:
Thank you very much.
Fred Barstein:
And thank you for watching 401KTV. Stay tuned for more programs like this.
