3 considerations for job-seekers to jump-start retirement savings

The “Great Resignation” has caused workers to evaluate what benefits from their job they find most valuable. For many organizations, it reinforced the importance of offering a holistic benefits package that can support and retain current employees, as well as withstand industry competition. One of the most demanded benefits we’ve seen across the board is access to a comprehensive retirement plan through an employer.

As a result of the pandemic, there was a mass exodus of the workforce, leaving many individuals forced to pause their retirement contributions. Now, as workers begin to reenter the workforce and find opportunities better suited to their needs and aspirations, it’s important they seek a retirement plan to support their goals as well. Luckily, we are in an employee market where workers have the unique ability to pick and choose the job opportunity that’s right for them.

Job-seekers should take this time to determine their employment priorities, whether it’s culture, compensation or benefits. If saving is a priority, then it’s important to look for a position that allows you to do so.

Of course, ensuring your employer offers a retirement plan at all is the first step, but there are other specifics to consider about the position and the plan that may factor into your ability to save. Here are three factors job-seekers should consider to optimize retirement savings:

1. Compensation and opportunities to save. Make sure the position will pay a salary that allows for savings. Some companies don’t offer retirement plans because they don’t pay their employees a large wage. You need a salary that not only covers your bills and other expenses, but provides strong saving power.

Compensation isn’t only salary. Other aspects of the job, such as remote work, should also be considered. Imagine how much money it takes to commute to the office, between car maintenance, gas, buying lunch or coffee — it begins to add up. If you work a remote, or even a hybrid position, you can take the amount you save on commuting and apply that to your retirement fund.

2. Employer contribution. Prospective employees should consider whether the employer offers a matching contribution, and if they do, at what rate. It’s also important to consider their vesting schedule. For example, an employer may match 50% up to a 4% contribution, but only vest 25% a year. That means the employee isn’t getting the full benefit until four years in the future.

Some employers value making their retirement plan as attractive as possible for their employees, and this can be an indicator of the atmosphere and company culture. Knowing they get the full vested amount from the very beginning is especially appealing to those trying to supercharge their savings.

3. Fees. Not every job-seeker knows to ask about fees, but it can impact your savings over time. Lately, several plan administrators are offering higher participant fees so the plan sponsor can pay lower employer fees. Historically, the employer paid more in fees to cover their participants. In this reversed model, the employer is essentially making the employee pay for their retirement plan. Employees should ask potential employers about the fee structure in their retirement plan to see what fees might come out of their savings such as participant fees, asset fees and commissions. This may seem minor, but if you’re on a plan that has no asset fees, that’s 3% more in your savings.

In today’s employee market, simply offering a retirement plan isn’t enough, especially for employees reentering the workforce with plans to catch up on savings. Employees looking for a new role should recognize they are in a position where they can choose to work at the company that best fulfills their needs and priorities, such as culture, compensation, or retirement savings and benefits.

Andrew Meadows is the Senior Vice President of HR, Brand + Culture at Ubiquity Retirement + Savings. He has two decades of experience in the retirement and savings space and is a passionate advocate for savers and the small business community. Headquartered in San Francisco, Ubiquity Retirement + Savings is a financial technology company that pioneered online, flat-fee retirement plans for the historically under-served small business market. The firm has helped more than 10,000 businesses contribute over $3 billion toward retirement savings since 1999.