In this interview at the NAPA 401(k) Summit, Peter Kapinos of Empower Retirement speaks with John Sullivan about the Empower student loan debt solution, a new initiative designed to help employees manage student loan debt while continuing to save for retirement.
Key Points:
- Scope of the Problem: Over 45 million Americans carry student loan debt, totaling over a trillion dollars, with 38% of borrowers over age 40.
- Impact on Retirement: Nearly 50% of borrowers say student loans prevent them from contributing to retirement savings, creating long-term financial insecurity.
- Empower’s Solution:
- “Next Step” Analysis: A tool that helps users prioritize between paying off student loans and contributing to their 401(k).
- Personalized Recommendations: Guidance on refinancing, forgiveness programs, and tailored next steps.
- Plan Sponsor Tools: Employers can contribute toward employees’ accounts (e.g., making retirement contributions based on loan payments) as a retention and attraction incentive in a tight labor market.
- User-Friendly Design: The tools are built to be intuitive and accessible, using plain language and designed with feedback from real users.
Kapinos emphasizes that these solutions are crafted for broad understanding and usability, regardless of an individual’s financial literacy. More details are to be released through Empower’s representatives and the Empower platform.
SEE MORE:
Empower Retirement Releases Real-Time Plan Design Platform
As Good as It Gets: What Advisors Want and Need from 401(k) Fintech