TACKLING STUDENT DEBT FOR OUR EMPLOYEES

Groundbreaking program solves savings catch-22: Pay off my loans, or save for retirement?

Tackling Student Debt for Our Employees

Jun 26 2018

We've seen the headlines: $1.5 trillion in student debt in the U.S., $620 million more than credit card debt. 2017 graduates, on average, have just shy of $40,000 in student loans, each. And to top it all off, nearly 70 percent of Millennials aren't saving for retirement.

That's a big problem, when every decade you wait to save for your future means you need to save twice as much.

Health technology company Abbott is now tackling the student debt crisis head-on for its U.S. employees with the implementation of a groundbreaking program that solves a savings catch-22: Pay off my loans, or save for retirement?

Abbott's Freedom 2 Save Plan will enable full-time and part-time employees who qualify for the company’s 401(k) – and who are also contributing 2 percent of their eligible pay toward student loans – to receive the equivalent of the company's traditional 5 percent "match" deposited into their 401(k) plans, without any 401(k) contribution of their own.

In practical terms, that means participating employees could have $54,000 in their 401(k) plans after 10 years they wouldn't otherwise have. That’s assuming a starting salary of $70,000, 3 percent merit increases each year and an average market return of 6 percent. By the time those employees retire, that contribution could likely be worth hundreds of thousands of dollars.

"Our employees have invested a lot in themselves to earn their way into Abbott, and we don't want student loans to prevent them from beginning to save when time is on their side," said Steve Fussell, executive vice president, Human Resources, Abbott. "With this program, we're changing the retirement savings formula. If you’ve got old school debt, we've got new-school retirement investing."

We know we compete for the best and brightest minds, people who have degrees ranging from science and engineering to sales and business development. We hired more than 1,000 people under the age of 35 last year in the U.S., the vast majority of whom had college degrees. In fact, more than a third of those 31-35 had a doctorate degree, and the same percentage had a master's degree.

One of those hires was Rariety Monford, who says she plans to take advantage of the program.

"I was out-of-state for my biomedical engineering degree, so my student loans are more than double the average," Monford said. "Paying it off is my No. 1 goal. I plan on using Abbott’s tuition assistance program when I attend graduate school in the fall, but this program will be a huge help in making sure I’m saving for the future, while still aggressively paying off my loans."

The benefit pairs with Abbott's industry-recognized total benefits package that includes medical coverage, health and wellness programs, commuter benefits, childcare solutions, and an array of innovative retirement programs.

See coverage in the Chicago Tribune and The New York Times.

 

true
accessibility

You are about to exit for another Abbott country or region specific website

Please be aware that the website you have requested is intended for the residents of a particular country or region, as noted on that site. As a result, the site may contain information on pharmaceuticals, medical devices and other products or uses of those products that are not approved in other countries or regions.


The website you have requested also may not be optimized for your specific screen size.

Do you wish to continue and exit this website?

accessibility

You are about to exit the Abbott family of websites for a 3rd party website

Links which take you out of Abbott worldwide websites are not under the control of Abbott, and Abbott is not responsible for the contents of any such site or any further links from such site. Abbott is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement of the linked site by Abbott.


The website that you have requested also may not be optimized for your screen size.

Do you wish to continue and exit this website?