3 Ways To Change Communities Through 401(k) Plans Financial planners have an opportunity to change communities and help create a retirement-ready nation through leadership in the retirement plan niche. • Amie Agamata
A
s more baby boomers near or enter retirement age, there’s a realization that many Americans regardless of their generation have little to no retirement savings. In large part this is because pensions have become less popular over the past few decades. It’s rare to have a pension plan these days, and those without pensions may not have access to a retirement plan through their work either. Not only does this present an issue for middle- and upper-income individuals, but it’s also a real problem for lower-income individuals, especially those in underserved communities. Financial planners have an opportunity to change communities and help create a 38
retirement-ready nation through leadership in the retirement plan niche. Business owners often look to their advisors to implement 401(k) plans for their employees. Although some business owners choose to omit various 401(k) features, it’s up
1. Automatic Enrollment
Automatic enrollment is essential to transform communities, including those in low-income, underserved areas. By setting up the plan with automatic enrollment, employers nudge employees to build better
It’s rare to have a pension plan these days, and those without pensions may not have access to a retirement plan through their work either. to us as the advisors to encourage and provide leadership to help the employer recognize their opportunity to make an impactful difference in their employees’ lives through what’s possible in the plan document. Here are three 401(k) features that help change communities, especially those with lower incomes:
InsuranceNewsNet Magazine » February 2022
saving habits and, more importantly, help them get on track for retirement. Some employers resist this plan feature because they feel their employees may resent them if the plan includes automatic enrollment. However, most times, the plan is set up with conservative yet meaningful salary deferral defaults from 3% to 6%. While some may argue that 3% to 6% is not
