Further Proof that Auto-Enrollment is Key to Saving Earlier for Retirement
If you automatically enroll them, they will save… sooner.
A new survey has found the vast majority (84%) of workers that were automatically enrolled in their workplace retirement plan say they started to save for retirement sooner than if they had to take action to make the enrollment decision on their own.
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However, only one-third of employers currently offer automatic enrollment, and among those that do, just 21% have an automatic deferral rate of 6% of eligible pay, according to the latest quarterly Principal Retirement Security Survey, released today.
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The results come at a time when the U.S. Congress is considering legislation to incentivize auto-enrollment features in retirement plans to encourage workers to save or save at higher contribution rates.
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According to the research, employers offering automated plan features see a positive impact on overall plan success, with employees starting to save for retirement at an earlier age (80%), automated features increasing employee savings rates (65%), and plan assets growing faster (47%).
Read more @401 K Specialist
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