By Edward “Ed” V. O’Neal, Senior Vice President and Manager, Retirement Plans
National 401(k) Day this year will be observed on Friday, September 6. We all dream about our ideal lifestyle in our golden years, for some that may look like endless rounds on the golf course, while for others it could entail finally turning a hobby or passion into a startup business venture. National 401(k) Day serves as a reminder to check in on your retirement nest egg while also highlighting the importance of items like financial planning, your savings rate and asset allocation as key strategies to help make those retirement fantasies a reality.
Despite these efforts, surveys show that only 70% of Americans believe they are financially prepared for retirement, and although 79% of Americans work for an employer offering a 401(k) plan, only 41% choose to participate in the program.* Whether you’re an individual searching for ways to boost your retirement savings or a business owner hoping to encourage your employees’ financial well-being, there are multiple impactful strategies to commemorate National 401(k) Day.
For Individuals
- Take advantage of employer-sponsored retirement plans. If your employer provides an opportunity to participate in a retirement plan, like a 401(k), this can be an effective, tax-advantaged tool in helping to reach your retirement goals.
- Review and Rebalance Your Portfolio. Regularly evaluate your investment portfolio and make changes to ensure alignment with your retirement goals, time horizon and risk tolerance.
- Financial Education. Take advantage of financial webinars and workshops that can assist in providing valuable insights and tips on maximizing your retirement investments.
For Business Owners
- Consider Implementing SECURE Act Provisions. The recently enacted SECURE 2.0 Act introduced impactful plan provisions that can help expand employee plan participation and increase retirement savings. Some of the most discussed and popular provisions of the SECURE Act include:
- An automatic enrollment and escalation provision that is now required for most new 401(k) plans.
- Roth contribution availability for both employee elective deferrals and employer contributions now available with SIMPLE IRAs, SEP IRAs and 401(k) plans.
- An emergency savings account feature to permit employee access to some of their retirement assets for emergency needs
- Expanded and new tax credits to encourage and incentivize the establishment of new retirement plans for business owners
- Financial Wellness Workshops. Business owners should consider hosting informational sessions led by a financial advisor (or other qualified individuals) to educate employees about the benefits and importance of retirement planning, asset allocation strategies, budgeting, etc.
- Recognition and Rewards. Business owners should consider providing incentives and company-wide celebrations to acknowledge participation in company-sponsored retirement plans, along with the importance of setting retirement goals and developing healthy savings habits.
National 401(k) Day helps us all to remember to celebrate and prioritize the importance of retirement savings. Although this specific day is dedicated to promoting awareness and understanding of 401(k) retirement plans, along with encouraging individuals to save for their future, it also serves as a reminder for employees to review their retirement savings strategies and for business owners to ensure they are providing adequate retirement resources to their employees throughout the entire year.
*SpiritoftheHolidays.org (National 401k Day)
IMPORTANT DISCLOSURES: The information provided is based on internal and external sources that are considered reliable; however, the accuracy of this information is not guaranteed. This piece is intended to provide accurate information regarding the subject matter discussed. It is made available with the understanding that Benjamin F. Edwards is not engaged in rendering legal, accounting or tax preparation services. Specific questions on taxes or legal matters as they relate to your individual situation should be directed to your tax or legal professional.