Personal Finance Benefits for Workers by Extra 401K Money from Employers
During the 2008 financial crisis in 2008 companies left their employees to fend for themselves regarding any tools for financial goals including retirement savings plans. However, this has now changed to the benefit of workers as 401(K) matches have been restored to them and with extra money being contributed.
Various reports show that matches have returned to pre 2008 crisis levels by the actions of certain companies. Matches are regarded as strong influencing factors and tools for financial goals for people to save money regularly from their wages. These contributions are frequently valued in terms of many thousands of dollars each year for an employee.
Besides matches being offered as stimulation for participation, advice is being provided by companies to their employees. It is designed to encourage them to contribute more towards their futures, with the correct type of investments and as tools for financial goals. Research conducted shows that seventy three percent of mid to larger sized employers are providing money to match benefits. This figure compares favorably with that of 2009 which was sixty seven percent.
Various studies have shown that people are concerned about their future financial positions and it is challenging to get them involved with the 401(K) program. However, the personal advice being given could have a positive influence in the changing of attitudes, particularly regarding use as tools for financial goals.
Other statistics revealed show that about fifty percent of workers in their twenties, do not take up their options regarding 401(K) benefits. This is despite them forfeiting the benefit of the matching sum from their employers. Further and disturbing research shows that on their accord, only about one third of those with 401(K) plans utilize money as tools for financial goals on retirement. To help combat this pattern and ensure greater participation in 401(K) plans, about forty two percent of companies enroll their employees in the plans automatically.
Although employees have the option to reject the 401(K) plan, reports show that few do so. It is further shown that employees are subject to a type of inertia and contribute to the 401(K) plans if placed before them in an autonomous reaction. However, if they must start them directly, they will not take up the option of these tools for financial goals.