Companies Are Now Offering This Perk to Get Their Employees to Save

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If you struggle to prioritize your savings goals, you’re not alone. Find out how some employers are helping staff save more money. 

Having extra money in a savings account is an excellent way to prepare financially for the unexpected. For many people, it can take a long time to reach their savings goals due to prioritizing must-pay expenses. But some companies are offering a new employee perk to help. If your employer provides a benefit like this, it could motivate you to increase your savings contributions.

Some employers are offering to match savings contributions

You’ve probably heard of employers offering a 401(k) match as an employee benefit. If an employer offers this, it will typically match employee contributions up to a certain percentage. This benefit makes it easier for workers to increase their retirement account contributions.

Investing for retirement is important, but building an emergency fund is also essential. After all, life is full of twists and turns, so you never know when you’ll need money for an unexpected expense. Having a solid emergency fund can help you avoid credit card debt.

Some companies are finding new ways to incentivize their workers with unique employee perks. Similar to matching retirement contributions, some employers now offer a savings account match to help their workers boost their savings. This benefit could motivate more people to prioritize saving.

These companies are helping their workers save more

At this time, employer savings matches are a rare find. But that’s not to say it won’t be a more common occurrence in the future. You may wonder what brands are offering this perk. Levi Strauss & Co. is one company that provides this benefit to its workers and has been doing so since 2015.

The clothing brand now partners with the BlackRock Emergency Savings Initiative to match employee savings contributions and has over 1,250 employees participating. But this isn’t the only company helping its employees focus on saving. Other companies that partner with the BlackRock Emergency Savings Initiative include BestBuy, AutoNation, and ADP.

This new law could help more workers save for emergencies

The SECURE 2.0 Act became law at the end of last year. This legislation includes provisions that could make it easier for employees to prepare for retirement. But the law could also encourage more workers to save for emergencies. Beginning in 2024, employers will have the option to set up emergency savings accounts for workers. They can automatically sign employees up and defer up to 3% of their salary to the account. Workers can opt out if they choose.

Employees can make after-tax contributions to their accounts. While employers can’t contribute money directly to the savings accounts, they can make matching contributions to their employees’ retirement accounts throughout the year. Employees can only contribute up to $2,500 to their savings account (or a lower amount set by the employer).

If an employer offers this and a worker defers $2,500 from their paycheck to put into their savings account, their employer can offer a dollar-for-dollar match by contributing up to $2,500 to the employee’s retirement account. Each year, the first four withdrawals from the savings account are penalty-fee. When workers move on to a new job, they can cash out their emergency savings account or roll it over into a Roth IRA.

This law could help more workers prioritize savings while allowing them to take advantage of a retirement contribution boost. Since saving for emergencies and retirement are crucial personal finance goals, this benefit could be a win for many workers planning financially for the future.

How to boost your savings without help from your employer

You can still prioritize your savings goals if your employer doesn’t offer a savings match. For workers who are trying to increase their savings account balance, this strategy may help. Setting up automatic transfers from your checking account to your savings account can ensure you don’t forget to save regularly. You can easily do this through your bank.

Even if you only save a few dollars each week, your account balance will grow over time when you make regular contributions. Stashing your savings in a high-yield savings account is recommended because you can get an extra boost by earning interest. Don’t neglect your emergency savings, even if you can only afford to start with a small savings goal.

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