These tools can help boost 401(k) participation
When it comes to maxing out a 401(k), it’s better to show employees, rather than tell.
So if you’re constantly encouraging your employees to increase their 401(k) contribution, your best bet to pass this handy 401(k) calculator around. Employees simply put in their pay period frequency, annual income, age and employer-match details, and they instantly get a detailed look at the percentage they need to contribute in order to get the most of their employer’s match while reaching the IRS limit.
Make sure employees understand that the ultimate goal here is maximizing your employer’s matching contribution, thereby maximizing take-home pay.
Another tool for the younger crowd
For a younger employee fresh out of school, it can be difficult to show them just how important it is to contribute to their 401(k) while they’re young.
So instead of a lecture, show them the benchmarks they need to be hitting, courtesy of Fidelity Investments. According to Fidelity’s calculations, most employees should aim to save at least eight times their ending salary in order to meet basic income needs in retirement. Therefore:
- Age 35: 1x salary
- Age 40: 2x salary
- Age 45: 3x salary
- Age 50: 4x salary
- Age 55: 5x salary
No lectures or complicated math here for the young folks. Have this information posted in break rooms, dispersed with pay envelopes and share it every time open enrollment or fee disclosures come around to keep it top of mind. That way the twenty-somethings of the office may get a fire lit under them to start saving for their golden years.
Do you have any strategies for increasing 401(k) enrollment? Let us know in the comments below.
Free Training & Resources
White Papers
Provided by UJET
Further Reading
Earned wage access, also known as on-demand pay, is being leveraged by your peers as a key recruitment and retention tool for workers who m...
Heads up, Finance pros: HR might be coming to you soon for input and approval on new OBBBA benefits changes. Much of the media coverage...
Here’s a common rollover scenario: An individual leaves one employer for another. The previous employer offered a 401(k) plan. The...
Year after year, surveys show about half of all employees don’t tap their allotted personal time off (PTO). While some companies allo...
Financial wellness programs often sound expensive or complex, but the truth is that one simple step — helping employees better unders...
Americans use more healthcare services than any other people. So we pay more as a result — and the cost is going up every year. 2025 ...