Estate Planning News

AARP Study: Auto 401(k)s Generate Positive Returns For Employers, Employees

Enhancing 401(k) programs with automatic features can generate a double-barreled investment success, enabling employees to save more for retirement and employers to better recruit and retain those employees. That key finding is in a new AARP-commissioned report, "Enhancing 401(k) Value and Participation: Taking the Automatic Approach," released today by AARP and prepared by global professional services firm Towers Perrin.

"Auto 401(k)s are a powerful, cost effective way for businesses to give their employees a savings boost," noted Jon Dauphiné, AARP's Director of Economic Security Strategy. "At the same time, these plans can provide the employer with an important recruitment and retention tool."

According to the report, competitive retirement benefits, including a 401(k) plan, are among the top 10 considerations for today's employees when choosing an employer, and are even more important for workers age 50 and older. 401(k) plan enhancements can lead to greater employee engagement, which in turn can produce sizable economic returns for a company.

The research suggests that employer contributions and enhancements to 401(k)s offer a larger, positive return on investment (ROI) that can sometimes exceed the ROI for spending on other key reward elements, such as pay and bonuses. This high ROI is likely due to employees' increasing focus on retirement savings and security in an era when responsibility is increasingly shifting away from the employer to the individual.

"People are concerned about having enough money to retire and value working for a company that provides cutting-edge retirement vehicles that work for them," explained Dauphiné. "Auto 401(k)s make it easy for busy workers to sign up and invest."

Contact our Plano estate planning attorney now.

	Did You Know?
	The costs and expenses of a conservatorship are paid by your estate A CONSERVATORSHIP is if you suffer from an incurable disease or are involved in a debilitating accident and are unable to manage your own affairs, state law might require someone to go to court to have a conservator appointed by the court. The conservator is given the authority to make financial decisions and handle your financial affairs, under court supervision, when you lack the capacity to manage them on your own.