401(k) planning a common theme among businesses of all sizes

401(k)s are no longer the exception, they're the rule, among advanced planning benefits that employer offer, a new poll reveals.

Not only do most business owners want their employees to enjoy the job  they're doing, they also want to make sure that workers' hard efforts are improving their fiscal futures, particularly when it comes to retirement. One of the most common employer-sponsored benefits companies provide are 401(k)s, knowing the advantages that advanced planning provides, according to a newly released study performed by the Transamerica Center for Retirement Studies.

Nearly three-quarters of businesses currently in operation offer a 401(k) or something similar to workers, TCRS reported. Additionally, for large companies - specifically those that employ 500 staff or more - 92 percent provide these employee benefits. The same is true for the vast majority of businesses who have 99 workers or fewer, only to a smaller extent at 72 percent.

Part-time workers far less likely to have 401(k) benefits
However, part-time employees - those who work 40 hours per week or less - seem to be getting the short end of the stick. Less than 4 in 10 firms - 38 percent - make 401(k) benefits available to part-timers, the report said

Catherine Collinson, TCRS president, indicated that it's in employers' interest to make 401(k)s available to all of their staff members, especially if they want workers to be in a strong a financial position as possible and provide them with options, like those who may want to go part-time without sacrificing their 401(k) earnings.

"In today's world, individuals are increasingly expected to self-fund a greater portion of their retirement income, but they need help in order to be successful," Collinson explained, speaking to the U.S. Senate Special Committee on Aging in June. "Closing the gaps and improving the retirement outlook of Americans can best be achieved if approached as a shared responsibility among policymakers, employers, industry, and individuals in which each does their part."


A majority of businesses offer 401(k)s to help their employees retire on target. A majority of businesses offer 401(k)s to help their employees retire on target.

Few certain about retiring comfortably
Even though Americans by and large are fully aware that retirement does not come cheaply for those who want to maintain their lifestyle in their post-career years, few are certain they'll be able to achieve this when the time comes. Only 21 percent of workers are "very confident" they'll be able to retire comfortably, according to a separate study conducted by the Employee Benefit Research Institute earlier this year. However, in what supports the notion that employer-sponsored benefits work, is that those with them - such as a defined contribution plan or individual retirement account - are more likely to be bullish about finance their retirement effectively. Specifically, 26 percent with retirement plans were very confident compared to 10 percent without.

"Only 10 percent without a plan are confident about retiring comfortably.

"Among those who are confident about retirement, it's overwhelmingly among those who have a retirement plan," said Jack VanDerhei, research director at EBRI. "Even if you control for discrepancies in age and income, the likelihood that a respondent is either somewhat or very confident that they will have enough money to live comfortably throughout their retirement years is 22 percentage points higher for those who have an IRA, DC plan, and/or DB plan than their counterparts without a retirement plan."

Just as workers need to plan ahead, the same is true for business owners and their long-term financial sustainability. Leveraged Planning® Solutions helps to make this possible. For more specifics on Leveraged Planning® Solutions and why it may be a strategy suited for your needs, speak with a GFD Services advisor. 

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