401k Employee Education

In an effort to keep clients and business partners up to date on 401k employee education trends and developments, Lawton Retirement Plan Consultants, LLC (LRPC) suggests the following resources.

401k Best Practices: Employee Education. Have you started planning your annual 401k employee education sessions? Generally, most plan sponsors conduct employee education sessions during the early part of the new year to explain changes that went into effect on January 1. As you think about your annual education sessions, keep the 401k education best practices in this post in mind.

401k Employee Education Tip – Helping Participants Make Better Decisions. Behavioral finance studies have shed new light on how investors make decisions. Study results recently shared by Fidelity Research have illustrated the concept of regret as it relates to decision making. Investors experience “action regret” when making a poor investment decision. In contrast, they experience “inaction regret” when choosing to do nothing when given an opportunity to make an investment that proves to be successful.

401k Employee Education Tip – Overcoming Ambiguity. Recent behavioral finance studies have shown that most participants invest too conservatively. As a result, most are not on the road to building an account balance large enough to fund the sort of retirement they expect. How can employers help plan participants become better investors? Helping employees understand and overcome ambiguity is a good first step.

401k Employee Education Tip – Overcoming Worry. We all worry. You might be surprised to learn that the worry we devote to our 401k plan investments has been studied. Worry is never constructive. It is even less helpful when it alters the way we manage our 401k plan investments. Behavioral finance studies have shown that the more we worry about our investments, the more conservatively we invest.

12 Reasons Not To Roll Your 401k Into An IRA. Generally, it is a bad idea for participants to roll their 401k balances into an IRA. Find out why in this post.

Adding A Leg To The Three-Legged Stool. The three-legged stool approach to retirement planning may have to change.

Answers To The Top 10 Employee 401k Questions. For more than 30 years I have helped employees from companies like Apple, IBM, AT&T and John Deere with their 401ks. I have found that some of the 401k plan questions employees have pop up frequently. You probably have the same questions about your plan. Following are the top 10 401k plan questions I receive along with answers.

BlackRock Interview With Robert C. Lawton (PDF). Robert C. Lawton, President of Lawton Retirement Plan Consultants, is interviewed by former Wall Street Journal editor and BlackRock executive Kelly Greene on how to design the best 401k plan.

Educate Your Employees On Using HSAs In Retirement Planning. If you offer a High-Deductible Health Plan (HDHP) to your employees, they probably have the ability to contribute to Health Savings Accounts (HSAs). I believe that nearly everyone eligible to contribute to an HSA should max out their HSA contributions each year. Here’s why.

Employee Education Policy Statement Can Help Set Goals (PDF). Rather than just abandoning your 401k employee education program, or resigning yourself to mediocre results, consider taking a harder look at your process by constructing an Employee Education Policy Statement.

Help Your 401k Participants Make Better Investment Decisions. Every time we experience volatility in the markets, some of your 401k plan participants decide to sell out of equities (locking in losses) because they get scared. Others know they need to increase their contribution rate to capture your maximum company match, but they never act. Why do participants do these things? Justin Goldstein has written about the behavioral finance concepts that underpin these actions. In this post, I have taken these concepts and added my thoughts on how you can help your 401k participants overcome these destructive behaviors.

Help Your 401k Participants Manage Risk. Helping your participants understand and manage risk is an important step on the journey to helping them become successful investors in your plan.

Help Your Employees Become Successful 401k Plan Investors. In order to invest successfully in their 401k plans, participants should be aware of the keys to being a good 401k plan investor. Consider sharing the strategies outlined in this post in your next employee education session.

Helping Your 401k Participants Cope With Volatile Markets. Volatility is often present in equity markets. During times of significant volatility, your 401k plan participants can become very nervous. Plan sponsors and their investment advisors should help participants remain calm during periods of intense market fluctuation by sharing the suggestions in this post.

How To Recession-Proof Your 401k. Eventually the current good economic times will end and we will slide into recession. Find out how participants can prepare their 401k accounts for the eventual economic downturn. 

How To Use Active Management In Your 401k Plan. A passive investment management approach is appropriate for many 401k plan participants. But indexing isn’t right for everyone. Many participants are not satisfied with market average returns. Nor do they feel it makes sense to lock-in 100% of every market decline. Those are only a few of the reasons to consider active investment management. This post lists many others.

Key Ways To Help Your 401k Participants Become Better Investors. Your 401k plan participants have developed bad habits and make many investing mistakes. Dalbar calculates that for 2016 the average equity investor earned a little more than 7% while the S&P returned nearly 12%. Many of those investors are 401k plan participants. This post outlines some of the investing errors your participants often make and suggestions on what you can do to help them avoid the most common investing mistakes.

Retirement Readiness: Employee Responsibilities. In order to achieve retirement readiness, employees need to take the actions outlined in this post.

Retirement Readiness: Employer Responsibilities. The plan attributes outlined in this post have become associated with a 401k plan that is designed to help participants achieve retirement readiness.

Retirement Readiness: Resetting Expectations. Most of us are not on track to fund an adequate retirement for ourselves. What can we do?

Six Important 401k Education Tips. When I lead 401k employee education sessions, employees often ask me what they should be doing in their 401k plan. I share with them the six items contained in this post.

Stop Making 401k Contributions — Fill Up Your HSA First. This post explains why it is more important to max out HSA contributions before making 401k contributions.

Study Gives Edge To Roth 401k Contributions Over Pre-Tax 401k.  A frequent question I get from 401k plan participants is “What type of contributions should I make Bob, Roth 401k contributions or traditional pre-tax 401k contributions?” After reading the results of a study that was published in The Wall Street Journal, my answer has changed. Making Roth 401k contributions appears to be better for everyone!

The 11 Most Significant 401k Misconceptions. Over more than 30 years as a 401k plan consultant, I have worked with some of the most prestigious companies in the world including Apple, AT&T, IBM, John Deere, Northern Trust and Northwestern Mutual. And, I am always surprised by the simple — but significant — 401k misconceptions many people have about their plans. Here are the most common 401k misconceptions I run across.

This Is How Much Money You Need To Retire. How much do your 401k plan participants need to accumulate in their accounts in order to retire without making significant lifestyle adjustments? The experts disagree. Learn about the items that impact participant financial needs.

Using Behavioral Economics To Help 401k Participants. 401k participants need to overcome the obstacles listed in this post in order to achieve retirement readiness. Find out how you can help them master these challenges.

Using Behavioral Finance To Help With 401k Decision-Making (PDF). Recent behavioral finance studies have shed new light on how investors cope with the challenges of making financial decisions. Study results shared by Fidelity illustrate why many 401k plan participants make such poor decisions. Learn what is keeping your participants from making better decisions and what you can do to help.

Using Neuroeconomics To Improve Employee 401k Decision-Making. A white paper titled “The Silent Value: Advice for the 21st Century” describes the challenges most of us face when attempting to make good financial decisions. Using the science of neuroeconomics (a combination of economics, neuroscience, and psychology) the authors state that many of us hamstring ourselves by maintaining various biases and emotional connections that end up resulting in bad investment decision-making. The white-paper shared the neuroeconomic tendencies that lead to poor individual financial decisions. I have included suggestions on how to overcome these biases with your 401k participants.

What’s The Right 401k Contribution Rate? T. Rowe Price, the mutual fund giant, recently completed a study which recommended the percentage of gross income that participants should add to their 401k plan accounts each year to achieve retirement readiness.

What Retirees Wish They Would Have Known. Your employees have hopes and dreams about what their retirements will look like. Right now they are following a retirement planning path they hope will lead to a better way of life when they are no longer working. Unfortunately, there are many stumbling blocks and wrong turns they can experience on their journey. Recent studies have uncovered some important retiree regrets that you can share with your employees in your 401k education sessions to help make their paths to retirement more successful.

Why You Shouldn’t Take A 401k Loan. Find out in this post why participants shouldn’t take loans from your 401k plan.

Additional Resources

Understanding Retirement Plan Fees and Expenses, from the DoL

Consider downloading this 28-page booklet from the Department of Labor (DoL) if you are looking for information on 401k plan fees to share with your employees or your leadership group.

Retirement Toolkit, from the DoL

Your employees who are close to retiring should consider reviewing this fact-filled pre-retirement piece published by the Department of Labor (DoL).

Unsure if the fees you’re paying your 401k providers are reasonable?

 

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12 Low-Cost Ways to Improve Your 401k Plan

After working with hundreds of 401k plans for more than 30 years, I have compiled a list of low-cost quick fixes that can make a big difference in your 401k plan. Click the button below and complete the form to download the list.