Americans aren't savers. We consistently trail other industrialized nations in the Rainy Day World Cup standings. In fact, last year, Americans spent more than they earned for the first time since the Great Depression.
To make matters worse, the team's best savings talent -- the Silent Generation -- has since retired. And the new prospects -- generations X and Y -- aren't particularly promising.
Nothing illustrates this better than the lack of retirement planning at the office.
According to the latest Hewitt Associates Study of more than 220 large U.S. companies, only 6 percent are confident their employees will take accountability for their own retirement future this year, down from 12 percent the year before. That's a bigger drop than the president's approval rating -- in Iraq.
Other Hewitt numbers shed light on the dwindling saving trend as the workers get younger: Less than a third of 18-to-25-year-old workers take part in their company's 401(k)plans. By contrast, 72 percent of baby boomers participate.
So what are those companies doing? They're looking at an American solution to a uniquely American problem: They're making it easier. Seems more and more employers are looking to automated options to turn retirement saving into more of "a reactive decision."
In order to encourage workers to take control of their retirement savings, 23 percent of companies are very likely to add automatic enrollment features in their 401(k) plans by the end of the year. Thirteen percent of companies are "very likely to add contribution escalation features."
"Automated features change the equation so that inertia around retirement saving and investing works in employees' favor: If an employee does nothing, it is OK because the 401(k) plan is on autopilot," explains
Hewitt's Lori Lucas, director of participant research.
Companies also are encouraging their employees to hit the books -- so to speak. The vast majority of the
surveyed employers -- a whopping 96 percent -- say they are "somewhat or very likely to focus on making sure their employees understand how their 401(k) plan works and the value of it."
Increasingly, employees are making their own decisions. And not only do they need guidance -- they crave it.
Brokers might be selling products to employers, but it means nothing if the real client, the employee, doesn't understand what's offered. And doesn't sign the enrollment form.
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