Younger Team Members Often Don't Enroll in Retirement Plans -- But That Can Hurt Your Company
Plan participation is never guaranteed, especially for entry-level workers
It’s important for companies that offer retirement plans to get everyone to participate. Not just to help the employees, but to help the plan meet its compliance requirements.
Unfortunately, all too often younger workers, especially those new to the job, don’t sign up. They're too busy. They don't see themselves retiring anytime soon. They need the money for rent, a car, paying off college loans, a trip to Bali, etc. We all know the excuses.
This is particularly relevant to entrepreneurs, given that startups, in particular, tend to hire armies of younger workers.
One solution is to enroll employees automatically and then make sure they’re increasing their contributions each year.
Ideally, employees should be increasing their contributions to 10 percent over time. That way, they’ll see a hefty amount socked away for retirement and understand the value of tax-deferred savings and compounding.
You’ll be doing your employees and your plan a big favor.