A good effort has been made by companies to get more people to invest in 401(k) plans. One feature that works to boost participation is the auto-enrollment feature that accompanies 401(k) plans. But it’s not perfect.
The offering is both a convenient and effective method for accumulating retirement savings, since a percentage of the employee’s pay is automatically deducted pre-taxed, and then placed in a select investment vehicle. Plans offering automatic enrollment have an employee participation rate of 82%, compared to 65% participation in plans where funds are voluntarily applied, according to Vanguard.
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