More American workers are being automatically enrolled in these plans, giving them a fighting chance to retire comfortably.
Filling out annoying paperwork and making complicated decisions regarding retirement may become a thing of the past, according to Vanguard, one of the world’s largest investment management companies.
They recently issued their “gold standard” retirement report and it stated that at the end of 2013, 34 percent of their plans used automatic enrollment, and employees who were signed up through this method had a participation rate of 82 percent, dwarfing the 65 percent of those who used voluntary methods.
“401(k) and other defined contribution plans have enabled millions of American workers to accumulate savings for retirement. Automatic programs have played a key role in this success,” said Jean Young of Vanguard’s Center for Retirement Research.
Other highlights of this report include:
- Sixty-nine percent of these plans automatically boost their contribution rate each year for participating employees
- A larger number of younger, lower income workers are benefitting from automatic enrollment
- • In 2013, 62 percent of workers joining for the first time were in plans that had implemented automatic enrollment
Gary Herman, President of Consolidated Credit believes saving for retirement is essential for everyone. “It’s wonderful to see that younger employees are starting to benefit from auto enrollment plans, but everyone of all ages should have some type of retirement planning in place. Your golden years will be upon you before you know it, and preparing now is of the utmost importance.”
If you need help planning for retirement or require expert advice on other money management issues, don’t hesitate to contact Consolidated Credit for a free financial evaluation.