Betterment, a leading robo-advisor, is unveiling an exciting new feature that allows its corporate clients to automate matching payments to employees' 401(k) accounts based on their student loan debt payments. This groundbreaking provision, stemming from the Secure 2.0 Act, permits employers to contribute to retirement plans by considering employees' student loan repayments.
Recognizing the significant impact of student debt on retirement savings, Betterment aims to provide a solution that encourages individuals to prioritize both loan repayment and long-term financial security. By incorporating this unique student loan 401(k) matching solution into their modern 401(k) offering, Betterment aims to broaden plan participation among those who were previously hindered by their student debt.
Sarah Levy, CEO of Betterment, emphasizes the importance of this innovative feature, stating, "We understand that student debt can hinder retirement savings. Our industry-first student loan 401(k) matching solution is a compelling addition to our modern 401(k), enabling individuals to overcome the obstacle of student debt and save for their future."
While renowned for its low-fee, automated investment portfolios, Betterment's range of services has expanded to include high-yield savings accounts, custody options for registered investment advisors, and automated 401(k) plans tailored to small and midsize businesses.
With this latest development, Betterment continues to revolutionize the financial industry by empowering employees to manage their student debt without sacrificing their retirement savings.
Betterment Expands Offerings for Employer Clients
Betterment, the leading provider of automated investment services, is expanding its range of services for business clients. Acting as a 401(k) plan fiduciary and administrator, Betterment now offers a registered investment advisor program to employees participating in these plans.
Edward Gottfried, Senior Director of Product Management at Betterment at Work, explains that the company has been collaborating with many employer customers to provide a product that leverages the retirement and student loan repayment provisions of Secure 2.0. Since the moratorium on federal debt repayment ended in September, interest in this offering has spiked. Additionally, Gottfried believes there is a potentially much larger market for Betterment's feature that automates matching contributions.
Despite this potential, Gottfried notes that there are still many employers across the U.S. who may not be aware of this benefit or the ease with which they can access such a program. He anticipates that more employers will become interested in the 401(k) match on student loan repayments as a tool to attract and retain top talent.
A recent survey conducted by Betterment, which included 1,000 full-time U.S. workers, revealed that 21% of respondents would consider switching jobs if a prospective employer offered a matching contribution tied to their student loan repayments. This indicates that employers offering this benefit may gain a competitive edge in the job market.