The way people save for retirement is shifting, particularly when it comes to employer sponsored retirement accounts.
Today’s employees, millennials in particular, like to have control over their money rather than contributing to accounts set up by their employer. They also aren’t as likely to stay with the same employer for their entire career as those in past generations have done. And the introduction and massive growth of the gig economy has made this type or retirement account obsolete for a huge portion of the population.
According to Susan Langer, CEO of Live.Give.Save., more than 50% of the U.S. population isn’t saving for retirement. And in some demographic groups, it can actually be upwards of 80%.
The Spave App
So the company recently launched an app that could help to solve this problem. The Spave app allows individuals to set aside a certain percent of their spending to go to an approved non-profit organization, a savings account, or various retirement or investment accounts.
Once you download the app, which is currently available on iOS and coming soon to Android, you need to spend a bit of time connecting all of your relevant accounts or selecting from a list of approved charitable organizations. But once you’ve done that, Langer says everything works automatically.
“It really is ‘set it and forget it,’” she says.
For businesses, the app could work as a complement to employee engagement programs or other benefits offerings. For example, you could encourage team members to sign up for the app and then promise to match their contributions to charitable organizations or to a savings or retirement account at the end of each year. You could use this in addition to other benefits offerings or potentially offer it to contract or part time workers that don’t qualify for full benefits.
Currently, you have a couple of options for matching employee contributions using the app. Each individual users has access to reports for their own saving or giving. So at the end of the year, you could have them submit their report so you can match their contributions fully or up to a certain amount. Or they could give you access to their account so you can access that information directly, as long as you have their permission. Spave is also looking to make this process more seamless in the future.
Langer explains, “We are working with Red Wing Shoes to develop our small business engagement model – creating a spaveKit with turnkey communications to use spave as an employee engagement tool, particularly as part of the company’s Wellbeing Program.”
The app is currently free for both employers and employees. Langer says that small businesses that are interested in using the tool as part of their employee engagement efforts should visit the website and contact her to discuss options.
The company is also working on adding features so you can build the functionality into your existing employee benefits package using spave’s API. Those more advanced features would come at a cost. But Langer believes that this model of employee engagement is one that can be a benefit to both employees and businesses.
She says, “Offering these engagement and wellness programs can help you attract top talent, retain them, and motivate them. It shows employees that you really get it and you understand their needs by letting them have more control over the process. And especially with the gig economy, that is so important and critical.”
In addition to the retirement aspect, spave’s focus on charitable contributions could also appeal to modern employees who are becoming increasingly socially conscious. As an employer, you could match contributions to each team member’s organization of choice or even choose monthly themes or causes to promote charitable giving as a group. You might even use the app in conjunction with group volunteer outings or other types of charitable work that shows your employees and the community how much you care about doing good as a company.
Image: Spave AppMore in: Retirement