Test Your Savings Knowledge with this Savings Quiz which will reveal how much you understand about the realities of saving in America.
With defined contribution (DC) & 401k plans now a primary source of retirement income, it is incumbent on employers to ensure that their employees are saving and investing effectively within those plans.
â€¢Over one-third of all eligible employees do not participate’at all’in their company’s retirement savings plan.
â€¢More than 90% of those who do participate fail to take full advantage of the legal maximum contribution limits.
â€¢Nearly one-fifth of participants are invested in a single nondiversified investment option.
â€¢About 20% have outstanding loans within their DC accounts, risking a smaller balance and less earnings potential if the loan is not repaid.
These results are alarming when we consider that the work-place savings plan is the primary retirement savings plan for most working Americans. Each of these missed opportunities can be costly and can devastate an employee’s chances to enjoy a financially secure retirement. One potential solution for achieving retirement readiness is if the plan sponsor leverages automated savings techniques so that a DC plan, by default, can work to maximize retirement savings for all employees: automatic enrollment, automatic deferral increases, and automatic default into an age-based lifecycle option or managed account.