In our Personal Financial Basics workshop, we show employees that saving in their retirement plans early in their careers is much more effective than trying to play catch up later. In our example, Duane (our early saver) contributes $960 a year to his employer sponsored retirement account for 10 years beginning at age 26. His sister (and our late saver) Jane contributes the same amount per year to her retirement account for a period of 30 years starting at age 36. We then ask the group, "Assuming they both make an 8 percent rate of return, who do you think will have more for their retirement?" Often times we hear, "Jane, because she's saving longer!"

Well, as you probably have guessed, because of his head start, and the power of compounding, Duane ends up ahead with a nest egg close to $140,000, compared to his sister Jane who has managed to accumulate only about $110,000. For many participants this example serves as a wake-up call motivating them to start contributing to their own retirement plans as soon as possible. By simply seeing the difference, they now have a reason to save.

With only about a third of employees 25 and younger contributing to their employer-sponsored retirement plans, it may be easy to assume that young employees aren't making it a priority to save. But the reasons they aren't saving may go beyond this. We see how this simple example causes employees to want to begin participating in their plans every day in our workshops, which indicates that it's not so much a lack of desire to save as it is a lack of educating employees on the benefits of saving.