Participants generally have very good intentions when it comes to saving for retirement.
Unfortunately, even the best-intentioned frequently get into a "rut"; the decisions they made when they first filled out that enrollment form tend to stay in place indefinitely. Try as we may to encourage them to revisit that deferral savings assumption when family circumstances change, when they get their annual salary increase, or even on occasions such as their birthday, those good intentions all too frequently are pushed into the background by what seem to be more pressing concerns.
This month's Know How takes advantage of January's focus on setting New Year's resolutions to remind participants that a relatively small increase in deferral rate can add up to a lot of additional retirement security.
The example presented on the next page highlights three ways in which an extra 1% deferral can combine to make a difference, even for a relatively modest salary base and relying on a conservative rate of return assumption.
Ultimately, of course, the best motivation is a direct, targeted reminder to the participant—perhaps in the form of this edition of Know How. As always, we look forward to your comments and suggestions.