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Money has been tight, and the idea of $10,000 appearing out of nowhere seemed appealing.
Recently I went through the dilemma of whether or not I should take my retirement savings out from my 401(k) (a mere 20 years prematurely). Money has been tight for us, and with a baby on the way in a couple of months, the idea of $10,000 appearing out of virtually nowhere seemed appealing. So what if I would need to pay nearly a third of that amount in taxes and penalties? I would like money now, please.
Thankfully a little research talked me out of coughing up all that money to the government and helped me see the sense in patience.
Apparently I’m not alone because according to survey data from the Charles Schwab corporation, 43% of workers believe they are likely to reach their retirement savings goals with their 401(k) contributions. That confidence has gone up since 2023, which only showed 37% of people feeling like their retirement goals were in reach. Despite unsettling economic trends, people’s optimism regarding their retirement goals have somehow gone up.
Lee McAdoo, managing director of Schwab Retirement Plan Services had this to say about the data:
“An improving economic climate tends to boost financial confidence, but it’s not the only factor. We’re seeing heightened awareness around 401(k) investments and performance—a promising sign that workers are actively engaging with their accounts and cultivating knowledge to help them reach their goals.”
Along with that confidence, users are becoming more cognizant of how to get the most of their 401(k) investments. According to survey data from Charles Schwab, 92% of users know how to check 401(k) performance, and 69% of people know what investments to choose for their 401(k). Workers understand better than ever the importance of a 401(k) and confidence is slowly, but surely growing about their future retirement prospects.
Now this is where you come in.
According to that same report from Charles Schwab, 61% of workers feel they need advice from a professional on how to manage their 401(k). That number has gone up by 6% from 2023. So, what is the data telling us? People absolutely want to invest in 401(k)s, but they need your help to manage their retirement. A whopping quarter of the workforce has reported wanting more advice from their employer on how to plan for retirement.
At this point, it’s clear that employees are looking for companies that don’t only provide 401(k) matching, but also provide tools to understand their investments. If you want to stand out in an extremely competitive job market, providing 401(k) matching and education to go along with it, is absolutely essential.
Pendant makes benefits like 401(k) matching extremely simple to understand for your employees. Rather than having to send an email to an HR representative, or trying to awkwardly glean information from coworkers, your employees can easily get the whole story from Pendant.
Your Pendant page dedicated to 401(k) matching explains how an employee can become eligible for the benefit and how to enroll.
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Pointing your employees to an interactive, informative portal like Pendant saves time for everybody–you included.
Thanks to Pendant, I didn’t lose a third of my retirement contributions due to an early withdrawal. It was simple to check the status of my 401(k) and the penalties associated with taking that money out before I hit retirement age.
Here’s what I read on my company’s Pendant page that changed my mind about withdrawing early:
“If you make a withdrawal from your 401(k) before your turn 59 1/2, you'll be subject to a 10% early withdrawal penalty and an automatic tax withholding of 20%. That's 30% of your withdrawal that you don't get to see.”
As I kept reading, I was surprised to find that my company allows me to borrow money from my 401(k) and have loan payments made through payroll deductions. Like I said, I’ve got some big expenses coming up, and a low-interest loan from my 401(k) seems like an excellent way to help pay for a baby.
None of this information would have been easily accessible to me without Pendant. Count me as one of those workers who’s feeling more optimistic about my retirement because of my employer.
