It was often thought that the laws of scale would solve everything. The more the merrier so to speak. When applied to your 401(k) plan although, the opposite might be true.
Auto-enrollment in 401(k) retirement plans was mandated in the Pension Protection Act of 2006. The PPA saw the idea as a way to help ensure that employees at least had a jump start at retirement. By enrolling new employees automatically, the theory of getting more workers involved in the plan sooner would them an opportunity to grow their future right from the first day (in some cases). At the time, it was thought to solve the under-use of these plans by a great many workers.
Is a lower company match going to impact your retirement future? Will you increase your contribution to offset the lower match or do as some have historically done, reduce your contribution in kind?
Read more about the high cost of autoenrollement on your retirement plan.
From Paul Petillo, Managing Editor of Target 2025.com and a fellow Boomer.