Do you get whipped into a frenzy over National Whipped Cream Day? Despite its name, try to remain calm during National Panic Day. And reach out to a brother or sister during National Siblings Day.
There are nearly as many National Days during the year as there are special interests. But few have as much importance in our lives as National 401(k) Day, which is the Friday following Labor Day, as well as National Retirement Security Month throughout October.
National 401(k) Day was started in 1996 by the Profit Sharing/401(k) Council of America (PSCA), now known as the Plan Sponsor Council of America (PSCA). “The Friday following Labor Day (Monday) was chosen so employees can ‘start the week with Labor Day and end the week with Retirement,’” the PSCA explained.
The objective of the special day is to promote retirement savings education, something that nearly every employer that sponsors a 401(k) undertakes. It’s a propitious goal since the PSCA reports that less than 40 percent of Americans can answer basic questions about their 401(k).1
National 401(k) Day is also a good time to encourage employees to take advantage of their opportunity to prepare for retirement. Although 79 percent of employees work for a company that offers a 401(k) plan, the PSCA reports, only 41 percent actually contribute to one.
Yet, the 401(k) remains one of the most if not the most popular retirement savings vehicle in America. Consider that 401(k) plans have $5.6 trillion in assets as of March 31, 2020, the latest figure available, according to the Investment Company Institute (ICI).2 Nearly 60 million workers save for retirement in their company’s 401(k) and millions more former employees and retirees also participate.
While those figure are massive, the ICI asserts that, “more can be done to help working Americans take the fullest possible advantage of the opportunity to save for retirement through these plans.”
The ICI cites research indicating that workers will save more through 401(k)s and other defined contribution plans with the right incentives, services, and guidance. Moreover, helping workers better understand 401(k)s through education and better disclosure will also boost participation, according to the ICI.
So how should you mark National 401(k) Day? The PSCA has a few ideas of its own to stress the long-term benefits of saving for retirement that employers might consider:
- Give your retirement calculator a spin. Encourage employees to determine their retirement readiness on your 401(k) plan’s retirement calculator, filling in their personal information to get an estimate on how much money you will need to live on each year in retirement.
- Know thy numbers. Once employees know how much they need to save to retire, they should work backwards to determine an adequate savings rate. Do they need to save more? Should they invest more or less aggressively? Everyone should periodically track their 401(k) and know their numbers so they can retire on their terms.
- Lunch and Learn. Your retirement plan provider can provide educational resources to help employees learn more about planning for retirement, investment for retirement, and taking steps to make sure they’re ready to retire before simply taking a leap of faith. MassMutual offers virtual education seminars, which have become increasingly popular and highly effective.
No matter how you recognize National 401(k) Day, doing so will encourage employees to make the most of one of the most valuable opportunities available to secure their future and protect the ones they love. And you can’t say that about National Insect Repellant Awareness Day.
So enjoy the special day in September and make the most of the week in October. After a lifetime of work, a secure retirement is certainly worth celebrating.
1National 401(k) Day, Plan Sponsor Council of America, https://nationaltoday.com/national-401k-day/
2ICI Resources on 401(k) Plans, https://www.ici.org/401k#:~:text=401(k) percent20plans percent20hold percent20 percent245.6,of percent20former percent20employees percent20and percent20retirees.