Leverage educational tools for national 401(k) Day
September 09, 2022
It might not garner the same enthusiasm as Christmas, Halloween or other holidays on the calendar, but the observance of national 401(k) Day® should be cause for celebration. Granted there are no cookies, candy or costumes, but financial professionals and plan sponsors can use the opportunity to increase awareness about the importance of planning for retirement.
Started by the Plan Sponsor Council of America, 401(k) Day is observed each year on the Friday after Labor Day (this year is September 9, 2022). Originally established more than two decades ago, the observance is intended to raise awareness and, more importantly, participation in 401(k) retirement plans.1
While conversations surrounding 401(k)s are appropriate any day of the year, consider shining a light on plans offered through your organization by sharing financial education tools and encouraging plan participants to leverage this retirement planning vehicle to a greater extent.
Calculate retirement savings
A recent survey of more than 15,000 employees in retirement plans administered by Cuna Mutual Group indicated that only one-quarter (24%) of respondents knew how much money they will need to retire comfortably. The good news is that many employers have the tools they need at their fingertips to help their employees make that determination.2
Cuna Mutual Group provides a variety of educational resources, including the RetireOnTarget® income projection tool that automatically calculates an 80% income replacement value at full Social Security age. It also demonstrates how much an individual needs to contribute to their plan in order to reach their goal and can factor in other income streams. Participants can even model different scenarios to make sure they’re on track. This tool is simple and straightforward — a must in today’s world — and is accessible online. Encourage employees to begin by calculating where they stand now and where they’d like to be.
Take control of managing investments
As investments grow, their overall mix may change and asset allocations may no longer be in line with an individual’s original plan or current risk tolerance.
Rebalancing an individual’s 401(k) may be in order, helping to more accurately reflect a person’s desired investment mix. Many retirement plans make it easy to manage through automatic rebalancing and/or investments designed to adjust over time (example: target-date funds).
Another consideration for those who’ve been participating in a retirement plan for a while is ensuring that any beneficiaries are properly listed. Participants should consider any changes in their family status, such as grown children or a marriage or divorce. Designated beneficiaries should be reviewed and updated periodically to reflect a participant’s current wishes, and can be done easily online.
Promote financial wellness programs
Observing national 401(k) Day is a great opportunity to boost financial wellness among participants. Cuna Mutual Group offers a vast library of educational resources for plan participants and their employers to help make retirement planning less intimidating.
Employer insights, quarterly participant education campaigns and engagement tools like emails, newsletters, videos, posters, print materials and more can help foster financial wellness and make retirement more approachable. Employers may even want to consider hosting a presentation on a variety of topics, from the basics of investing and enrollment, to rollovers and developing strategies at any age. These types of workshops can be helpful any time of year and provide opportunities for interactive conversations and engagement.
Don’t forget the basics
A comprehensive financial wellness program shouldn’t just help participants plan for the future; it should also help them with the here and now. Provide tools that educate about everyday money management, budgeting, paying off credit card debt and minimizing expenses. Also stress the importance of taking full advantage of an employer’s matching funds whenever possible and the benefits of tax-deferred contributions.
Take measures to help participants prevent the financial consequences of unpredictable circumstances that can derail a financial plan, like unexpected healthcare costs or a change in family structure or job markets. Help them avoid a hands-off approach that overlooks unnecessary fees or missed opportunities.
Cuna Mutual Group recognizes numerous observations throughout the year, including America Saves, Financial Literacy Month, 401(k) Day and National Retirement Security week to bring more focus on educating participants on better money management. Don’t miss out on these opportunities to help participants leverage the benefits of an employer-sponsored plan and to increase their chances of a successful retirement.
1Plan Sponsor Council of America, 401(k) Day 2022, no date.
2Cuna Mutual Group, Helping employees achieve financial security for a stronger future, 2021