But that idea contained a flaw. In the early years, limited choices made it easy for employees. The proliferation of the number of options in later years, however, exposed the lack of sophistication within the employee cohort. That can lead to bad decision-making. Alternative solutions were needed.
Tag "Guy Baker"
If a company sees a substantial number of employees exit their firm, this can have a detrimental impact on all areas. Even the company’s 401k can be negatively affected in a number of ways.
It’s not a simple matter of flipping a switch and allowing cryptocurrencies in plans. Because these are alternative investments, the plan sponsor will need to learn enough about them to make an informed decision.
This elegance earned a Nobel Prize for several smart professors. You must forgive them, though, for they had a far limited toolkit to work from. Still, this was the original source from which “risk” sprang.
Perhaps it’s time to cut the cord of “financial wellness” and take your tonic of financial reality. Accept the schoolmarm for the discipline she brings, because that remains the most honest way to the riches of a satisfying retirement.
Plan sponsors can benefit from motivated employees, and the 401k plan is a tool to achieve this motivation. What precisely can plan sponsors offer in addition to the usual company match to make their 401k plan more enticing, more attractive, more motivating?
Familiarity may breed contempt, but it also makes you sloppy. Do you know plan sponsors that have forgotten they need to address these matters?
The mistaken promise of participation may have an all-too-familiar ring to corporate retirement plan veterans.
All these strategies can be employed today and have proven themselves effective. It’s unclear that disclosing projected retirement income will provide the kind of incentive that will work.
The proliferation of investment options promised participants a plug-and-play plan. In the process, it created a 401k Frankenstein monster of a mess.
