If you're thinking of starting a 401k program for your employees, then you're thinking of making an investment in both their futures and that of your company. First coming to popularity in the eighties, 401k programs are attractive benefits that many potential employees look for when seeking employment. Traditionally, 401k plans have been viewed by some companies as very expensive and out of their reach but the truth is that they are some of the most inexpensive and effective investments that you can make. Although they may initially ignore them, as your workers approach retirement they'll make good use of their 401k plan. Currently nearly sixty percent of Americans nearing retirement have a 401k plan or something similar.
The CheckPoint HR Blog
The U.S. Department of Labor (DOL) has announced new regulations, calling for 401(k) providers to disclose all fees associated with the cost of retirement plans. With the new rules, 401(k) administrators must divulge the details about any fees being charged to run the plans. This information will also be passed onto employees investing in the particular plans and reports will be distributed on a quarterly basis.
Planning for retirement can be a difficult process, but living in retirement can be just as difficult. Being prepared to face the oncoming challenges, both personal and financial, is necessary for living comfortably once work ends.
In August of this year, the Defined Contribution Institutional Investment Association reported when 401(k) participants began taking loans, cash outs and withdrawals from their plans, their retirement security became depleted. According to the report, participants with low wages will have difficulty replenishing their retirement incomes after 31 to 40 years of plan eligibility.
Do your employees understand the costs associated with benefits? While they may understand the value of dental insurance, health insurance and 401(k) plans, a recent study conducted by the research firm LIMRA found that of 1,500 U.S. employees, 40% are unaware of their health insurance costs. The remaining 60% felt as though they knew the cost of their health insurance, however, of that 60% only 15% were able to provide a reasonable cost estimate.
Do your employees possess the knowledge, understanding and skills necessary to make informed decisions about the state of their finances? Most experts in the financial field agree that a person’s ability to make these decisions greatly affects the success of one’s financial plan.
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