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.
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The contribution levels pre-set by your plan do not guarantee you a secure retirement. They are just a starting point.
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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.
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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.
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You have the right to opt out of the plan altogether.
Learn more about auto-enrollment: