Building A Brighter Future For You And Your Employees
I wonder how many employees of companies that make matching contributions into their 401(k) plan know they could immediately double their contribution and savings, before it is even invested. Sound too good to be true? It’s not.
In Part 4 of my book, The Brighter Future 401(k), titled Creating Smart Savers, I describe in detail exactly how this occurs. Notice that the title of this section of my book is “Creating Smart Savers,” not Creating Smart Investors. Both are important and both are addressed in my book. However, the amount saved every year can be even more important to your brighter future than how it is invested, especially at the beginning of saving and especially when Uncle Sam and your employer combined can effectively double what you contribute from your paycheck.
Looking Forward To Desirement
Disseminating this knowledge about how your 401(k) plan works to multiply the contributions made by employees is an important building block to help them imagine how it may actually be possible to save now and create the brighter future they desire.
We refer to the years when you are no longer working as the “Desirement Years” instead of retirement years. These years are typically after age 60 or 65 and are characterized by having time to spend on the desires of your heart. Your 401(k) plan should have the tools you need to calculate what these Desirement Years will cost and how these funds will be created so they are available when you want them.
In my book, I describe the tools we make available to help employees determine the amount of income they will need per year to experience their “Desirement Wish List” during their Desirement Years. These tools can also be used to determine what needs to be saved each year, from now until when the Desirement Years start, considering social security and what has been saved already. With knowledge of the contribution multiplying effect, from avoided taxes and employer matching, the challenge of saving for retirement becomes a lot more manageable and even attainable.
Regular, robust employee education is a key ingredient to getting employees engaged, motivating them to save more on an incremental basis, and keeping them fully engaged in saving and investing. What we find is that when we teach the principles contained in my book, employees get interested and excited. They become ENGAGED. They might increase their savings rate, adjust their investment allocations and make progress toward their brighter future.
You can download a free digital copy of our book at http://www. firstwavefinancial.com/the-brighter-future-401k/. It contains important information about the tools we use to empower employees to take full responsibility for their retirement and more. Please feel welcome to contact me personally and schedule your complimentary consultation to explore steps you can take to make these resources available in your 401(k).