Three Objections (Help For HR)
HR has it tough. You’re everybody’s everything, you’re understaffed, you're underfunded (usually). We find that our plan sponsors in HR are often put in a spot to help influence employees in starting to contribute to their retirement plan and want to help! But as you know, you can’t render investment advice. We’ve made this guide for what you can say to the three most common reasons we hear that hold employees back from contributing and what we’ve found successful, without crossing the line of giving advice.
What we’ve written below includes options for if you have a match or not.
“I don’t think the market is at the bottom yet so I’m waiting to enroll.” (another version is “I’m waiting for a better time in the market to invest.”)
The problem: Makes sense at first - why not get in when the time is right? The problem is, we don’t know when the “bottom” will be, and with a 401k or 403b plan, money is being contributed each paycheck. That may not align with the “bottom” anyway!
What you can say:
Let’s think this through. We don’t know when the bottom is or will be because we don’t have a crystal ball. We do know that you’ll be investing over many years and that you’re going to need a lot of money when you retire. Do you think that maybe this falls under a low point for the next 40 years? What if you contributed a little now and then put more in later? You can change your contribution every [paycheck, quarter, month, etc.]
Your gross paycheck is currently $XXXX. So if you signed up to contribute X [4%], which is enough to get our full match amount, we’re talking about $XXX ($250?) going into the market this month. What if you got started now so you got your match? (If the match is 100%, you can point out there’s no place in the market where they can double their money instantly.)
“I can’t afford it.”
Dilemma -- this could be true, and you may not want all the information. The important part is to encourage good savings habits and highlight how your advisor is a resource for financial help.
What you can say:
Totally understand, and I thought I couldn’t either when I started. But you can sign up for just a little bit and then increase it later if you want to. That way you get started [and you get the match, because hey, that’s money that you’re working for that we’re willing to pay you!]. 1% of your check is $XX or you can just do XX [plan minimum] per paycheck. With the tax savings, I’m guessing you won’t miss it at all, but you can try it out. If after you see it missing on that first paycheck you decide you really need that money, you can cancel it any time or lower it for [the next paycheck, next month, quarter, etc.].
“I haven’t had a chance to look at the investments yet, so I’ll do it later.”
The problem: Unfortunately, most employees emphasize this too much rather than how much they can contribute – and the latter has WAY more impact on how much they’ll have for retirement. This is also an opportunity to help them schedule a meeting with your advisor for more help.
What you can say:
If you’d like, you can sign up and it will just go into the default investment [the target date fund closest to when you’ll turn 65], and then you can go in and change it from there once you’ve had time to look at it. The cool thing about the plan is you can change it anytime. Alternatively, let me hook you up with our advisor over email so you can have a quick conversation with them. Did you know that’s included and they’ll go into as much detail as you’d like? I don’t want you to miss out [on the match]!
Hopefully you can put these answers in your playbook if you find you’re having these conversations. As always, you’re the boots on the ground, so if you need help from an advisor team and you don’t have a good resource now, we’re happy to be that advisor to support you! Reach out today.