"Courageous plan design leads to successful retirement outcomes."
Enormous resources are used to encourage employees to participate in their employer's retirement plan. Yet three decades after the debut of defined contribution, in our experience employees still contribute too little to their plan or not at all, leaving them ill-prepared for retirement. Why?
We believe the problem isn't education, access or, as some claim, a "broken" system. We describe it in one word, inertia. In our opinion employees struggle to act in their own best interests even when they know it could improve their financial future. That's why employers should ensure that it takes less effort to succeed at saving for retirement than to fail.
Plan's that implement design changes can see excellent outcomes for their 401(k) participants.