The numbers are out... and a lot more young people are saving for their retirement.
That's in large part due to a change effecting the rules on 401K plans.
Local 12's Paula Toti shows us, while things are getting better ... many of you still need a wake up call.
Most workers are used to signing up for medical benefits ... but many ignore signing up for 401K plans. To encourage more workers to save for their own retirement ... a year ago the government made it easier for companies to sign up workers automatically for a 401K.
That means a worker is in the plan unless they take the steps to opt out.
And it seems when workers have to take that extra step ... they don't.
Fidelity Investments just did a survey of American companies and finds participation in a 401K plan has jumped 30 percent at companies that now automatically enroll employees into the plan.
And for younger workers ... or lower compensated employers, participation has jumped 50 percent.
"Most of the employees out there .. This is a huge benefit, wether they realize it or not."
Despite the big benefit to these employees CPA, Mike Clark at Cassady Schiller and Associates says many companies are not going with the automatic sign up.
"The larger companies are really resisting it. Especially larger publicly traded companies."
That's because this benefit costs money. Most plans with automatic enrollment have at least a three and a half percent company match on the first 6 percent the employee contributes.
"Especially when the company is going to provide a match .. If the company is providing a match it's a no brainer, you really should get into a 401k plan."
Workers under the age of 28 should especially listen up ... it's the group of eligible workers least likely to have a 401K.
With some of the plans that now automatically enroll workers ... they also automatically increase the amount that goes into the 401K by 1%a year. Fidelity believes here too ... workers won't bother to change that .... and continue to keep saving at a higher rate.
Good thing for the arm twisting ... when you look at all workers who are eligible for a 401K plan ... little more than half take advantage.
If you worry about putting money in a 401K plan because of the volatile stock market, remember you should be investing for the long haul.
Also keep in mind that plans come with a money market option... that is similar to a savings account.
