Money Matters: Many Americans don't use 401k plans

May 26, 2017 01:30

Sponsored by NEFE

Financial experts have agreed for a long time that people don't save enough for retirement. But a new study suggests the problem may run more deeply than many thought. Two-thirds of those whose employers offer a retirement plan don't use it, and a significant number of employers offer no retirement plan at all. Some states are considering plans that would give every worker some kinds of retirement plan options, but support has been slow to materialize.

As MarketWatch found, large companies are most likely to offer some kind of tax-deferred savings plan. But when small businesses are included, a recent survey found only about 14 percent of employers make 401(k) plans available. Only about 10 percent of workers have a more traditional pension plan, and most of those are baby boomers. Part of the reason for the lack of participation may be due to people changing job frequently, but in other cases, surveys find many employees simply do not know a plan is available to them.

To help your listeners/viewers/readers learn more about retirement savings plans, talk with some of the employers your community about what they offer. Talk with large companies and small businesses to learn about the different strategies they use. And interview financial planners in your market about the importance of taking advantage of tax-deferred savings plans and employer contributions to help build a more stable retirement.

Sponsored by the National Endowment for Financial Education
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Andrea Coombes of MarketWatch entered the 2016 NEFE/RTDNA awards contest with a story about 401k fees and why many consumers don't realize how much they can cost.