Credit card debt is a problem in this country, and it is likely a problem for a few of your company's lower level workers. Does your 401(k) plan offer a free resource to help them with this issue? Here is an example that happened this week with one of the plans I advise.
Logistics Co. uses Bloomwood as their 401(k) advisor, which gives every participant access to book unlimited one on one financial planning sessions with a licensed advisor for no additional cost.
Jane Doe books a time and initially wants to know about the difference between Roth and Traditional contributions. While talking about other ways to save, she mentions credit card debt. The advisor turns the conversation around and focuses on a potentially bad situation.
Jane Doe has $20,000 of credit card debt (25%+ interest rate) and makes $50,000 per year, and currently contributes 7% to her 401(k).
Long story short, advisor puts Jane's contribution rate to 0% and gets Jane on a plan (with real dollar amounts) to automatically pay down the debt over time. Jane can take the instructions to her bank and set it up with little fuss.
How many of your employees may have this problem but don't even know where to start digging their way out of the hole?
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