Promote Retirement Savings for America Saves Week 2021

Social media messages can help get the word out

Stephen Miller, CEBS By Stephen Miller, CEBS February 4, 2021
Promote Retirement Savings for America Saves Week 2021

America Saves Week 2021, taking place from Feb. 22 to Feb. 26, is an opportunity to encourage employees to start saving through their workplace retirement plan as early as possible and, if they can, to increase savings each year—even if only by a small amount. The website has social media graphics to download and share with employees.

Increasing their savings rate is a way for workers to pay themselves more during their retirement years. Younger workers will benefit the most by saving more sooner, given the number of years those added dollars will compound and grow, retirement advisors say.

America Saves Week is sponsored by America Saves, an initiative of the Consumer Federation of America (CFA), a nonprofit organization of over 270 consumer, education, advocacy and cooperative members.

Each day of America Saves Week has its own theme, along with daily theme graphics that can be shared in employee communications, such as:

  • Save automatically.
  • Save for the unexpected.

  • Save to retire.

  • Save by reducing debt.

  • Save as a family.

America Saves recommends that employers:

  • Share social media content to promote greater savings.
  • Feature savings-oriented messages on their employee websites using logos and web graphics.

Small Steps Make a Big Difference

According to 3,011 U.S. adults surveyed by Fidelity Investments in October 2020, more than two-thirds experienced financial setbacks last year due to the COVID-19 pandemic. With many workers put on furlough or facing reduced work hours, nearly one-third of respondents said they were in a worse financial situation compared with the previous year.

The findings are from Fidelity Investments 2021 Financial Resolutions Study.

A good message for plan participants is that "increasing your contribution rate, even by 1 percent, can make a big difference in your long-term retirement savings," said Kevin Barry, president of workplace investing at Fidelity. "What may seem like a small amount today can have a significant impact on your account balance in 10 or 20 years."

For example, if a 25-year-old employee making $40,000 annually increases her 401(k) salary deferral by 1 percent each year—perhaps during America Saves Week—then, after 12 years, she is likely to have boosted her retirement income by $1,930 per month, research by Fidelity Investments shows.

Adding Automatic Investing Features

For employers, America Saves Week also is a time to consider adding automatic enrollment for new hires to the 401(k) or similar plans, or adding an annual contribution-escalation feature to their plan.

"Overall, the amount people are saving is starting to ratchet up," David Reich, national president of retirement services for insurance brokerage HUB International, said last year. "But for people to be better positioned for retirement, it really needs to be 10 percent [of one's wages] at a minimum and closer to 15 percent" on average throughout an employee's career.

"Getting people there is the issue," he added.

Thanks to the Setting Every Community Up for Retirement Enhancement (SECURE) Act, signed into law at the end of 2019, employers offering a safe harbor 401(k) plan with an annual participant-contribution increase (or "auto-escalation") feature can raise plan participants' savings rates up to 15 percent of pay, unless participants opt out of these increases. Before the SECURE Act was passed, the cap on default contributions under an auto-escalation program was 10 percent for safe harbor plans.

Many plan sponsors with auto-escalation plans, however, haven't amended their plans to take advantage of the higher cap.

A 10 percent cap may "sound like it's going to be sufficient when you're bringing employees in at a very young age," said Jack VanDerhei, director of research at the nonprofit Employee Benefit Research Institute. However, "when you've got midcareer hires who unfortunately may not have had any coverage previously, or who may have cashed out those amounts, then having the ability to get those people escalated up to 15 percent is going to be extremely important."

Related SHRM Articles:

Take Steps to Measure—and Enhance—Financial Wellness Success, SHRM Online, February 2021

For 2021, 401(k) Contribution Limit Unchanged for Employees, Up for Employers, SHRM Online, October 2020

[SHRM members-only toolkit: Designing and Administering Defined Contribution Retirement Plans]



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