Three different organizations, three different missions. Why are we all committed to automatic
401(k)s? Because we know that Americans are not saving enough for retirement—and we can help. By combining our resources and expertise, AARP, the Financial Industry Regulatory Authority (FINRA), and the Retirement Security Project (RSP) pool our varied strengths to help employers and their employees save more effectively.
We know that automatic 401(k)s work. Participation rates typically soar to between 85 and 95% with these types of plans. With traditional 401(k)s, many employees fail to opt-in because they don’t know or understand their choices. Saving for retirement can seem so daunting that some employees simply do not participate. There is a term for this phenomenon—it’s called employee inertia. Automation uses this very inertia to benefit employees. When an employer takes the initiative to automate enrollment and set default investment options and savings levels, their employees benefit. They start saving earlier, save more, and feel good about themselves and their company.
We bring our combined knowledge and resources to automatic 401(k)s because they are a simple and effective solution to retirement savings.