With auto-enrollment, you are automatically enrolled in the company 401(k) plan when you become an employee. Your contribution level and investments will be pre-set by the plan. Easy, huh? Well, there are still some important things you need to find out.
Automatic features are making it easier than ever to have a savings plan. But beware: you may not be saving enough. Don’t get stuck on 401(k) auto-pilot. Take an active role in managing your account.
Always find out the terms of your 401(k) plan and take an active role in managing your savings.
The contribution levels pre-set by your plan do not guarantee you a secure retirement. They are just a starting point.
You may need to increase your contributions in order to get the employer match—highly recommended so you don’t miss out on free money.
You can change the investments (mutual funds) that are pre-set by your plan. Most auto-enrollment plans default to a target-date fund. Instead you may prefer to select individual funds offered by your plan in order to diversify your investments.
You have the right to opt out of the plan altogether.
Learn more about auto-enrollment: