Sherwin-Williams recently revealed its decision to suspend its 401(k) match starting next month, a company contribution that reportedly reached up to 6%. For employees, both at the paint manufacturer and elsewhere, it is a sharp reminder that even core workplace benefits are not guaranteed.
For advisors, however, it’s a cue to prepare clients for such retirement uncertainties, like when their benefit plans shift.
Teddy Awuah, senior retirement plan consultant at Prime Capital Financial, highlights the importance of “strong plan design.” In his view, employers need to create plans that enable employees to reach their retirement goals, even without an employer match.
“Behavioral finance teaches us that participants often benefit from a nudge to save appropriately. Features like auto-enrollment and auto-escalation, set at levels that encourage employees to save 10% to 15% of their income, can effectively overcome a lack of employer contributions,” Awuah said.
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