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Employee retirement readiness has been described as the efforts an employer makes with their retirement program to give employees the opportunity to fund and structure the retirement they desire. Both the employer and its employees have certain responsibilities to fulfill in order for employees to achieve retirement readiness. Following is a list of employee retirement readiness responsibilities.

Employee Retirement Readiness Responsiblities


The most important employee retirement readiness responsibility, employees have to contribute to fund their retirement. We live in a 401k, defined contribution retirement plan world. There are fewer and fewer employees who can expect a traditional pension from their employers. In order to succeed in a defined contribution world, employees have to ensure that at least 13% to 15% of their compensation flows into their 401k accounts each year.


All 401k plan participants are responsible for managing the investment of their account balances. Whether that means hiring a professional adviser, or educating themselves on investing concepts, the responsibility rests with the participant.


Very few employees will begin their retirement journey with the investment knowledge necessary to confidently manage their account. Employees need to take advantage of the resources their employers provide. These resources usually include group investment education sessions, one-on-one conversations with experts and online planning tools.


Funding a retirement is a sacrifice. By saving to fund their retirement, employees are electing a lower of standard of living today. This is incredibly difficult for most Americans to understand and embrace. We are a nation of consumers and have no trouble borrowing to meet our needs. We find it very difficult to save. As someone who has worked with retirement plan participants for more than 25 years, I can say with a lot of confidence that most Americans don’t eagerly embrace the challenge of diligently saving over time to achieve an end result that is a long way off.

Many critics of 401k plans have said that they have been a gigantic failure. Because 401k plans depend upon employee contributions, and nearly all employees aren’t contributing near enough, the experts feel all of us will be disappointed in the type of retirement we can finance. In order to succeed, employees must begin embracing the concept of Retirement Readiness with the same commitment as their employers.


About the Author

Robert C. Lawton, AIF, CRPS is the founder and President of Lawton Retirement Plan Consultants, LLC. Mr. Lawton has over 30 years of retirement plan consulting and administration experience and has provided consulting services to many Fortune 500 companies including: Aon Hewitt, Apple Inc., AT&T, First Interstate Bank, Florida Power & Light, General Dynamics, Houghton Mifflin Harcourt, IBM, John Deere, Mazda Motor Car Company, Northwestern Mutual, Northern Trust Company, Trek Bikes, Tribune Company, Underwriters Labs and many others. Mr. Lawton may be contacted at (414) 828-4015 or bob@lawtonrpc.com.

About Lawton Retirement Plan Consultants, LLC

Lawton Retirement Plan Consultants, LLC is a Milwaukee, Wisconsin-based independent, objective Registered Investment Advisory (RIA) firm providing investment advisory, fiduciary compliance, employee education, vendor management and plan design services to 401(k) plan sponsors. The firm currently has contracts in place to provide consulting services on more than $400 million in plan assets. For more information, please contact Robert C. Lawton at (414) 828-4015 or bob@lawtonrpc.com or visit the firm’s website at: https://www.lawtonrpc.com. Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser.

Important Disclosures

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance, tax, legal or investment advice. Each plan has unique requirements and you should consult your attorney or tax adviser for guidance on your specific situation. In no way does Lawton Retirement Plan Consultants, LLC assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations. Investors should carefully consider investment objectives, risks, charges and expenses. The statements in this publication are the opinions and beliefs of the commentator expressed when the commentary was made and are not intended to represent that person’s opinions and beliefs at any other time. The commentary does not necessarily reflect the opinion of Lawton Retirement Plan Consultants, LLC and should not be construed as recommendations or investment advice. Lawton Retirement Plan Consultants, LLC offers no tax, legal or accounting advice and any advice contained herein is not specific to any individual, entity or retirement plan, but rather general in nature and, therefore, should not be relied upon for specific investment situations. Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser and accepts clients outside of Wisconsin based upon applicable state registration regulations and the “de minimus” exception.