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By Michelle McKinnon, Financial Advisor

A couple months ago, a Wall Street Journal article caught my eye. It was titled “Companies to Workers: Start Saving More – Or We’ll Do It for You,” and explained that firms are boosting the automatic retirement savings rate. Among the reasons is they don’t want to be left with an aging workforce that doesn’t have enough money to retire and move on.

Three Keys:

Companies want to avoid being left with an aging workforce in the future

You might be part of a 401(k) plan at your workplace even if you don’t realize it

Retirement could come much later than you think if you haven’t saved enough

An important takeaway from this article is if you don’t think you have a 401(k) plan, there might be a chance that you do, meaning your company is automatically putting money into it from your paycheck. That might sound very similar to pension plans, which were common in the generation of our grandparents and to some degree our parents.

A pension plan means that companies would put away money for their employees’ retirement, then pay those funds out through a lifetime income stream once they retired. However, a lot of those pension funds have proven to be under-funded, most likely because companies didn’t expect people to live 10-20 years after retiring. But longevity is reality, and paying people for a significantly longer period of time is becoming difficult for those businesses.

So now that companies aren’t saving for their employees, individuals need to do it for themselves. Unfortunately, Americans generally aren’t doing a great job of that, and this article shines a light on the fact that companies are worried about our retirement. Businesses don’t want to have employees who will turn 65, 70, 80 or even 85 and still need to work because they don’t have that nest egg saved.

This article represents a good cue to look at the details of your 401(k) plan if you already have one, or to investigate the 401(k) plan options at your workplace if you don’t. See if you have any match potential – that’s free money you could be eligible for from your employer. I know retirement may seem like a long way into the future if you’re 25, 35 or even 45. But there are many variables to consider, so it’s important to start saving now.








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