401k plans may be getting simpler.
The article below discusses changes that may be on the horizon for your employer-sponsored 401k plan. The key points include:
1. Less investments to choose from. I don't like this at all. The idea is to not give people so many choices that they get confused. But I like the freedom to have as many options as possible.
2. Automatic enrollment. Your company may automatically enroll you in the plan as soon as you become eligible. The goal is to increase participation rates. I can live with this as long as the company gives you an opportunity to opt out before enrolling you.
3. Automatic contribution increases. For example, if you are currently contributing 2% of your salary, it would automatically be increased once a year so that the following year you would contribute 3%, then 4%, and so on. This annoys me a little. If I could afford to increase my savings I would. I don't need it forced on me. Of course you will be able to change your rate back again, or opt out completely.
Source Article
1. Less investments to choose from. I don't like this at all. The idea is to not give people so many choices that they get confused. But I like the freedom to have as many options as possible.
2. Automatic enrollment. Your company may automatically enroll you in the plan as soon as you become eligible. The goal is to increase participation rates. I can live with this as long as the company gives you an opportunity to opt out before enrolling you.
3. Automatic contribution increases. For example, if you are currently contributing 2% of your salary, it would automatically be increased once a year so that the following year you would contribute 3%, then 4%, and so on. This annoys me a little. If I could afford to increase my savings I would. I don't need it forced on me. Of course you will be able to change your rate back again, or opt out completely.
Source Article
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