February 13, 2020
MAKE IT A CONDITION OF EMPLOYMENT:
Your employer is putting more of your money in a 401(k) -- that's a good thing (ALESSANDRA MALITO, 2/13/20, Market Watch)
About 35% of employers are enrolling new workers in 401(k) plans, according to 2019 fourth quarter data from Fidelity Investments, which analyzes its customers' investing and saving trends. Typically, the default rate for automatic contributions into 401(k) plans hovers around 3%, but more than a third of plans in the fourth quarter had default rates around 5% or 6%, according to the report, which was released on Thursday. Only about 12% of plans used that rate in the fourth quarter of 2009.Choosing a higher default rate is critical for building an adequate nest egg for retirement, Murphy said. "The reality is, over the length of someone's entire career, that 1-3% difference can be massive for income in retirement," she said.Employers are also increasingly boosting their employees' contribution rates each year, too. The number of plans that had auto-escalation more than doubled in the last decade, from 9% at the end of 2009 to 19% at the end of 2019.
And tie it to an O'Neill account that runs from birth to 18.
Posted by Orrin Judd at February 13, 2020 9:35 AM