Retirement is the time in one’s life when, ideally, you reap the fruits of years of labor and relax in the shade of your nest egg. National 401(k) day, every Friday after Labor day (September 11 in 2020), encourages sponsors to offer information and communication about ways to save for retirement. But for more than 30 million Americans, the dream of retirement may be just that — a dream.
Changes in technology mean that following our parents (or grandparents’) example of sticking with one employer for twenty years or more to get a gold watch as a reward for those years of service is a relic of the past. Now more than ever before, it’s critical to have a viable plan for your post-work years — including a strong 401 (k)plan.
National 401(k) Day timeline
Congress makes automatic enrollments easier
The Pension Protection Act of 2006 made it easier for companies to enroll employees into a 401(k) plan automatically, encouraging more saving.
National 401(k) Day debuts
The Profit Sharing/401(k) Council of America launches National 401(k) Day to promote the importance of these plans.
401(k) plans hit $1 trillion
For the first time in its 15-year history, assets held in 401(k) plans hit $1 trillion.
Salary deductions allowed for the first time
The IRS created new rules allowing employees to make tax-deferred salary deductions.
- January 1, 1980
The 401(k) goes from dream to reality
On this day, a new provision in the Revenue Act of 1978 took effect allowing for tax- deferred compensation for bonuses and stock options, clearing the way for 401(k) retirement plans.
National 401(k) Day Activities
Talk to a financial counselor
It doesn't have to be expensive to speak with a financial counselor on 401(k) Day. Your bank or credit union may be planning to give a talk. If you're working, ask someone in the H.R. department of your job if they can do a presentation.
Plan a Lunch and Learn
If your school or job hasn't put together a special program for National 401(k) Day, take the bull by the horns and you do it! Not only will you be helping the entire community, you will also stand out with your boss or your professors. Try it!
If you can't attend a 401(k) Day event, go online or get a book on retirement preparation at the library. With just a little bit of effort, you will be rewarded with major tax savings and a more enjoyable retirement.
Four Facts About 401(k)s To Make You A "playa" In The Retirement Game
As of 2017, there were $4.8 trillion in assets held in 401(k) plans.
Ted Benna, a benefits consultant from Philadelphia, is considered the "Father of the 401(k)."
401(k) plans were initially intended to supplement traditional pensions.
401(k)s have replaced pensions as the predominant vehicle for retirement savings.
Why We Love National 401(k) Day
It simplifies a complicated subject
A lack of financial literacy is an on-going problem among Americans of all ages. National 401(k) Day promotes effective communication between plan sponsors and consumers needing help making the best retirement savings choices.
Saving for retirement is a must
Unless you're the type who wants to work until age 90, everyone needs a plan for their retirement years. The days of company pensions are long gone and Social Security will only get you so far. 401(k)s are among the best ways to save and National 401(k) Day promotes this important task.
It connects consumers with providers
The more you understand about your future retirement needs and the ways to reach those goals, the better prepared you will be. National 401(k) Day facilitates conversations between consumers and providers making a connection that will ultimately pay off for both parties.