Welcome to our series, where we will be offering up our secrets to creating successful retirement outcomes for you, as the plan sponsor fiduciary, and your employees. Today we’re going to explain why America has a savings crisis and the process we’re proposing to support your employees’ ability to secure retirement outcomes for themselves and their families.
But first, if you’re interested in learning more about our entire process now, please click here and we’ll be delighted to send you a free copy of our book “the Quintessential 401(k).” It’s full of valuable insights, strategies, and solutions to help you, the plan sponsor fiduciary, create the most effective and dynamic retirement program for you and your employee’s benefit.
So how do we fix America’s savings problem? First, we need to understand it so we have a chance to fix it. The average savings rate in America today is about 3% to 4%. The average account balance of a 401(k) participant is somewhere between $45,000 and $100,000 depending on their age and income. This is hardly enough money for the average employee to replace their current income at retirement, taking into consideration inflation and taxes.
401(k) plans have been around since 1980. While the total assets in all private retirement plans is in excess of $8 trillion, there is still not enough money in these plans to replace every working American’s income at retirement.
In addition, the Department of Labor’s new fiduciary rule, which rolled out in June, put an even greater spotlight on your roles and responsibilities as a plan sponsor fiduciary as well as the roles and responsibilities of your service providers.
Now is not the time to sit back and take a business-as-usual attitude. There are significant cost-effective strategies you can implement now to impact your employees’ future. Savings rates, income replacement ratio, fees and expenses, investment performance, and appreciation for you and your retirement plan are a few of the different opportunities for enhancement.
Stay tuned for the next installment of my series, where together we will tackle how much an employee needs to save and how to use the rule of 72.
If you’re ready to take action and are open to learning how you may be able to restructure your current 401(k) plan and your current approach to educating, motivating, and impacting your employees’ ability to secure retirement outcomes, our team here at Quintes is here to serve you.
You can reach us with your questions or comments at firstname.lastname@example.org, or you can give us a call at (831) 601-1710 for a no-obligation assessment of your 401(k) plan and how you can make significant improvements for you and your employees. We’d love to help you out.