The February 15 deadline for incorporating the new tax law’s lower withholding rates is upon us. For those that made the change ahead of the deadline, you probably witnessed a few smiles when employees saw some extra dollars in their paychecks. But did you give any thought to whether employees were putting those extra dollars to good use?
Over 60% of Americans say that money is a significant source of stress, and 44% would have to borrow or sell something to cover a $400 financial emergency. Due to tax reform, American households will take home an additional $1,600 per year on average. This is a great time to remind employees of company benefits that support their financial health. Some employees may be interested in increasing their retirement savings contributions. Others might like to put a few more dollars in their HSA account to take advantage of the triple-tax savings. For some, that extra money might be well spent on voluntary benefits that provide an extra layer of financial security. Or maybe now’s the time to get serious about their personal finances by eliminating personal debt or establishing savings for emergencies. Employees have to determine the best use for this extra cash – make sure it’s an informed decision by reminding them of everything your benefits program has to offer.