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Empowering Plan Sponsors to Support Retirement Readiness of 401(k) Plan Participants

June 20, 2023

As a plan sponsor, you play a crucial role in helping your employees achieve retirement readiness. By implementing effective strategies and providing valuable guidance, you can empower your plan participants to make informed decisions and build a solid financial foundation for their retirement.

In this blog post, I will share three key ways you can support your participants in becoming retirement ready.

  1. Education and Communication:

One of the most impactful steps a plan sponsor can take is to provide comprehensive education and effective communication regarding the 401(k) plan. Many plan participants may have limited financial knowledge, so it's essential to offer educational resources that explain the benefits and features of the plan in simple and accessible language.

And as I have explained in a recent blog post, changing demographics in the workplace are increasing the need for financial wellness programs in the workplace. Millenials and Gen Z are looking to you to provide programs to coach them to meeting their financial goals. 

Consider organizing workshops, webinars, or lunch-and-learn sessions to provide in-depth information about retirement planning, investment strategies, and the importance of regular contributions.

  1. Personalized Guidance:

Every plan participant has unique financial goals and circumstances. Offering personalized guidance can greatly enhance their retirement readiness. Consider partnering with financial advisors or retirement planning experts who can provide one-on-one consultations or group seminars to address specific participant needs. These experts can offer insights on investment diversification, retirement income strategies, and the importance of reviewing and adjusting contributions over time.

  1. Plan Design and Investment Options:

Thoughtful plan design and a well-curated selection of investment options can significantly impact participants' retirement readiness.

Consider the following:

a. Automatic Enrollment and Escalation: Implement automatic enrollment to ensure all eligible employees are enrolled in the plan unless they actively opt out. Additionally, utilize automatic escalation features that gradually increase contribution rates over time. These features help overcome inertia and encourage participants to save more for retirement without requiring manual adjustments.

b. Simplified Investment Choices: Offering a streamlined selection of investment options can prevent decision paralysis among participants. Provide clear explanations and support materials to help participants understand the available options and make informed decisions.

c. Target-Date Funds: Consider incorporating target-date funds (TDFs) into your investment lineup if you don't already. TDFs automatically adjust the asset allocation based on the participant's anticipated retirement date, gradually shifting towards a more conservative approach as retirement approaches. These funds offer simplicity and convenience for participants who prefer a hands-off approach to investing.


As a plan sponsor, you have a unique opportunity to support your employees' retirement readiness through their 401(k) plans. By focusing on education and communication, offering personalized guidance, and optimizing plan design and investment options, you can empower participants to make informed decisions and take control of their financial futures.

Remember, a well-supported retirement plan can enhance employee satisfaction and loyalty while contributing to a more financially secure workforce.

Interested in how we can help you and your employees be retirement ready? Let's connect! Call (626) 224-7715 for a complimentary consultation. 

The views stated in this post are not necessarily the opinion of Cetera Advisor Networks LLC. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. The target date of a target date fund may be a useful starting point in selecting a fund, but investors should not rely solely on the date when choosing a fund or deciding to remain invested in one. Investors should consider funds' asset allocation over the whole life of the fund. Often target date funds invest in other mutual funds and fees may be charged by both the target date fund and the underlying mutual funds. The principal value of these funds is not guaranteed at any time, including at the target date.