I've got to take stock of all the adrenaline this country's been running on lately. Employers appear to be in a hiring frenzy, and now our retirement plans are on a roll.
But how long will the party last? Even with an uptick in worker contributions and company matches in the first quarter, how can we concur we're now a country of savers?
Facts about how we've been able to boost 401(k)s show most accounts (two-thirds) were buoyed by market gains, and a portion of the increase can be traced back to automatic escalation, when workers' paycheck deductions are increased each year unless they opt out.
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Not too long ago, number crunchers at the Employee Benefit Research Institute slapped a grim reality on retirement saving: We're just not that into it. Forty-two percent of respondents to EBRI's survey say they guessed to determine their needed retirement savings while 70 percent say they are a little or greatly behind schedule in planning and saving for retirement.
I'm going to give workers the benefit of the doubt, and hope this latest news will drive a turnaround in savings habits and goals. But if the employee's cry for retirement help isn't enough to motivate you as an advisor, just listen to their benefits directors, who also aren't convinced employees are on a sensible path: According to Transamerica, the vast majority of benefits directors they surveyed lacked confidence in how capable employees are at making sound decisions about retirement preparation. Thirty-five percent rated employees as either "somewhat not capable" or "not capable," while 45 percent rated employees' capabilities as "neutral."
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