Women, Low Earners Least Likely To Embrace Full Retirement Match
|Targeted News Service|
A new survey by
The survey was conducted by an independent research firm and polled a random sample of more than 1,000 adults nationwide on their retirement plans.
"These survey results show that some groups of people in particular aren't maximizing the full value of their retirement plan," said
Helping employees maximize their match
The survey found that employees would welcome more information from their employers on making the most of their retirement plan match. Forty percent of the employees who are not currently contributing enough to get the maximum matching funds from their employers said they get reminders to do so and are happy to receive them. An additional 32 percent do not receive reminders from their employer but said they wish they did.
"An employer match is a very compelling factor in determining whether employees contribute to a defined-contribution retirement plan,i but just offering it is not enough," Hassara said. "Plan sponsors must ensure they are communicating the benefits of the match to employees, particularly those who are not currently reaching the full match. Their communications should be targeted to various groups' unique financial needs."
For low earners, for example, plan sponsors can explain the inherent benefits of saving for retirement and position the matching contribution as part of a larger focus on long-term financial well-being. For women, more information about the match may be effective: Of those not receiving the full match, 17 percent of women (compared to 10 percent of men) said that more information about how the match works would make them consider increasing contributions.
The long-term implications of missing the full match
There is clearly a need for outreach and information, as many Americans may not know what they're missing if they don't contribute enough to their employer-sponsored retirement plans to get the full match.
"Getting the full employer match on retirement savings, even if the percentage doesn't seem like a lot on paper, can have a significant impact on the total value of an employee's savings by the time he or she retires," Hassara said. "Providing employees with more concrete examples like these can really underscore the importance of increasing their contributions to maximize their match."
For more information about the survey, read the executive summary.
The findings come from
The survey was conducted by
Respondents for this survey were selected from among those who have volunteered to participate in online surveys and polls. Because the sample is based on those who initially self-selected for participation, no estimates of sampling error can be calculated. All sample surveys and polls may be subject to multiple sources of error, including, but not limited to, sampling error, coverage error, error associated with nonresponse, error associated with question wording and response options.
[i] The Plan Participation Puzzle: Comparison of Not-for-Profit Employees and For-Profit Employees, LIMRA, December 2010.ii Survey respondents were asked to give their best estimate to the following question: You are 35 years old, making
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