The CARES Act loosens the rules on taking a distribution from 401(k) plan accounts, allowing eligible employees to take what's called a Coronavirus-Related Distribution, or CRD. Despite the availability of these offerings, we've seen relatively limited participant activity in terms of certain actions with 401(k) and HSAs. Our recent Bank of America data showed that only 8% of eligible plan participants took a CRD from their 401(k), and 85% of CRDs were for less than $25,000, while the maximum distribution permitted is $100,000.

Though CARES Act provisions can certainly offer financial relief in the short-term, it's important to remind employees of the potential long-term implications of borrowing from retirement funds. While for some employees, right now their 401(k) may be the only option for getting necessary cash, as a general rule, dipping into retirement funds to cover a short-term need could cost them more in the long run.

It's critical for employers to offer holistic advice and access to professionals to help guide employees and provide information on other options that could be more beneficial to employees' long- and even short-term financial goals.

The value of holistic financial guidance in this environment can't be overstated. Employers are uniquely equipped to address this vital need through comprehensive solutions that reach across an employee's entire financial life.

How have retirement planning and employee benefits evolved as a result of the coronavirus? What benefits offerings do you see becoming important?

The impact of the coronavirus has brought the topic of holistic well-being into sharper focus. Employees are facing increased stress, greater demands on their time, along with the added challenge of working remotely and often serving as parent, teacher, and caregiver.

While the effects of these unprecedented times have yet to be fully understood, our research shows employees are noting an increased strain on their physical and mental health. Our recent Workplace Benefits Report, fielded between February-March of this year, found that physical and mental aspects of well-being outranked financial ones in employees' overall sense of well-being. In addition to that, overall, just under half of employees rated their financial wellness as good or excellent compared to previous years.

This underscores the importance of employers offering programs to support overall well-being to mitigate the effect of these times on their employees. Both tools and programs that support day-to-day roles and responsibilities, such as caregiving, and programs that support long term well-being, such as emotional resources to help manage stress, are necessary and especially important this year.

Considering potential economic impacts, programs that help employees manage their finances will also be more important than ever, as our research found that 38% of employees want to make progress towards their goals but feel they don't have any money to spare after monthly expenses.

Recent Bank of America research also shows that health care costs are a top concern among employees as costs and out-of-pocket expenses increase – as of year-end 2019, data shows that out-of-pocket health care costs have increased 23% in the last four years, and that employees spend, on average, $2,138 per year on out-of-pocket health care expenses.

The current environment underscores the value of tools such as Health Savings Accounts (HSA) for saving for health care expenses today and in the future. According to our recent data, employees are aligned in this thinking, as 67% of eligible employees are currently enrolled in Health Savings Accounts.

How are employees facing expedited retirement timelines navigating this difficult time?

Many Americans are re-evaluating retirement plans and priorities as they navigate changes brought on by the pandemic. Some are delaying retirement due to market and economic uncertainty, or pausing retirement plan contributions. Others are retiring early due to a change in job status or life priorities.

For those now facing expedited retirement timelines, there are tools in place help navigate this unique time. While typically it isn't advised to make withdrawals from 401(k) accounts, given the potential long-term impacts of borrowing from retirement funds, taking advantage of CARES Act provisions allows employees to take a Coronavirus-Related Distribution from their 401(k) plan accounts up to $100,000. For those struggling to meet short-term expenses due to change in job status, this could be a helpful option to consider.

To help with potential health care costs, those who have previously invested in HSAs will be pleased to know that both contributions and withdrawals to these accounts are tax-deductible, and have the potential to grow tax-free over time. Unlike other "use it or lose it" vehicles, HSAs can be used to fund qualified health care expenses both today and well into retirement, making them the perfect tool for employees to take advantage of especially in the case of an expedited retirement timeline.

What should employees consider when deciding whether to delay retirement?

For employees considering this option, a critical first step is to re-assess your holistic near and long-term goals for retirement, and determine any impacts to retirement savings goals and timelines. As you're doing so, initiate important conversations with family members and spouses to ensure you're aligned on these goals and any shifts to your retirement timing or lifestyle. This will give you the necessary foundation to realign retirement saving and investing strategies to plan for these adjustments.

Now more than ever, it's important to also take advantage of employer-offered and personal retirement savings strategies, as the environment has underscored the need for advanced planning amid uncertainty. While investing in employer-sponsored savings plans, such as a 401(k), be sure to capitalize on employer match programs and aim to maximize contributions over time. These contributions, along with their compounded interest, can lead to a stronger nest egg in retirement.