$400 billion+: Estimated size of 401(k) contributions by 2018
Contributions to employer-sponsored retirement plans are expected to increase in the coming years, according to Cerulli Associates. This is not just a blessing for participants, many of whom have been saving too little for too long. It also helps the industry, which faces an expected increase in withdrawals as baby boomers head into retirement. Cerulli suggests that to help increase contributions, advisors can consider combining automatic enrollment and escalation programs with adjustments to the matching formula, along with targeted, personalized participant communications.
Advisors can help by offering plan sponsors insights about the dynamics of coaxing participants to save more. Education isn’t just for plan participants.
Source: Cerulli Associates, “Cerulli Retirement Markets 2013: Data & Dynamic of Employer-Sponsored Plans”