Get All Access for $5/mo

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

By Scott Wylie Edited by Dan Bova

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

Chairman and CEO, First Western

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.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

The Side Hustle He Started in His College Apartment Turned Into a $70,000-a-Month Income Stream — Then Earned Nearly $2 Million Last Year

Kyle Morrand and his college roommates loved playing retro video games — and the pastime would help launch his career.

Science & Technology

Why We Shouldn't Fear AI in Education (and How to Use It Effectively)

Facing resistance to new technologies in the educational process is nothing new, and AI is no exception. Yet, this powerful tool is set to overcome these challenges and revolutionize education, preparing students and professionals for a future of unparalleled efficiency and personalized learning.

Business News

Apple's AI Has a Catch — And It Could Help Boost Sales

Not every iPhone owner will get to use the new Apple Intelligence.

Business News

Elon Musk Threatens to Ban Employees from Using Apple Products, Says Will Lock Devices in 'Cages'

The Tesla founder sounded off on X following Apple's 2024 Worldwide Developer Conference on Monday.

Business News

Y Combinator Helped Launch Reddit, Airbnb and Dropbox. Here's What I Learned From Its Free Startup School.

The famed startup accelerator offers a free course on building a business — and answers five pressing questions for founders.

Business Culture

You'll Always Have Anxious Employees if You Don't Follow These 4 Leadership Tactics

Creating a thriving workplace environment hinges on the commitment of company leaders to nurture and inspire their teams.