How to Increase Participation in a 401(k) Plan Among a Young Workforce
Here’s a known issue, at least in my experience: Most 27-year-olds can’t be bothered to save in their 401(k), unless you bribe them with a 401(k) match. “No match, don’t bother me.”
Rather than give up on 401(k) participation among 27-year-olds, let’s think through what would make it “inevitable” that they save. The first step to increasing participation in a 401(k) plan involves analyzing this as a sales problem.
Sales Obstacle #1: We insist on selling 401(k)’s to 27-year-olds as a retirement vehicle.
If they retire at 70, they’ll retire in the year …. 2052. For most 27-year-olds I’ve worked with, “2052” is just not relevant – yet. 2052 as the focus? No sale.
Solution: Sell the 401(k) plan as a savings vehicle to 27-year-olds in a way that is compelling to them.