Wednesday, May 05, 2010

Employers trend toward automated retirement planning for associates

MSN Money Central and Bankrate recently provided an article pointing out three “hot trends” in retirement planning to “force” employees to help themselves (libertarian in nature or not). The link for the article is here.

The most important trend seems to be “target date funds”, which make the mix of investments more conservative as retirement date gets closer.

Another trend is automatic enrollment in 401K plans, with up to 30% of major employers participating. Generally the automatic payroll deduction is 3%.

Still another trend is automatic enrollment in IRA’s, but without a matching contribution from the employer.

Is all this automation a matter of efficiency, or of sending a message: worker, you'll have to take better care of yourself as you get older.  We may not need you forever.

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