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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

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Opinions expressed by Entrepreneur contributors are their own.

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.

Related: When Does It Make Sense to Offer Employees a Retirement Plan?

Scott Wylie

Written By

Scott Wylie co-founded First Western in 2002 after recognizing the need for an integrated approach for delivering financial services to the growing affluent market. As chairman and CEO of First Western, Wylie provides leadership for the holding company, as well as management of the bank and trust services. Most recently, he served as chairman and CEO of Northern Trust Bank of Colorado after having sold his prior institution, Trust Bank of Colorado, to Northern in 1998.