Yet for all their interest in a social media savings message, 50% of young workers (compared to 39% of all workers) said one approach that would likely work is: “Stop trying to communicate. Instead, automatically enroll me with a high enough savings rate so I don’t have to think about it.’’ Of course if employers did ramp 401(k) withholding up to that level, young workers might be shocked at how much it reduced their take home pay and find it hard to save outside their retirement accounts—which takes you right back to the HelloWallet identified problem of workers lacking emergency funds and draining their retirement accounts. Plus, let’s not forget the student debt many young workers carry or the fact that if the AARP has its way, these kids will be paying through the nose for the baby boomers’ retirement, too. Bottom line: To stay on track for retirement, Gen Y is going to have to run a marathon.
All employees are looking for automatic, no decision, retirement plans. This includes automatically enrolled into an age appropriate portfolio. This makes your 401(k) plan more like a pension plan. This will reduce anxiety and improve results.
Please comment or call to discuss how to improve your company 401(k) plan.