Employers wish that preparing a workforce for retirement was a simple formula, but what everyone seems to learn sooner or later is that saving for the golden years of retirement is just not that simple. Employers realize that it takes an astute and energized employee base to make a self-funded retirement savings plan a viable retirement.
Recently The Plan Sponsor University held a regional Fiduciary Training Program at Adelphi University in New York, where program attendees were curious of “How much is the sufficient amount that a 401(k) Participant should be saving for retirement?”
Industry Perspective
Money writer Karen Damato has conducted research on the retirement savings habits of 401k participants and the results have been published.
During 2016 the investment management firm Vanguard reported that 601(k) participants contributed on average 6.2% of their compensation to their own retirement. When adding in employer contributions the average Vanguard participant experienced a total contribution of 10.9% during the year.
Fidelity reported a higher participant contribution of 8.4 as of March and a slightly higher total contribution of 12.9%.
Averages Provide a Good Benchmark
It is difficult for any advisor or actuary to provide a single magic number that works for everyone at retirement. In the absence of longevity projections or a health history it makes sense to be aware of how others are saving.
Plan Sponsors are learning that the guidance and advice of a retirement plan professional can be very helpful and it can make a significant difference for the plan participants. Plan sponsors are also learning that a Certified 401(k) Professional can make a significant positive impact on the company retirement plan. If you are interested in improving the performance of your retirement plan, you will want to seek out the services of a trained professional to assist you in the management of your company retirement plan.
