Spencer Williams

Just 23% of employees surveyed felt their employers were making a “significant effort” on financial wellness, and only 20% of employees expressed the same sentiment about retirement preparedness.

While we all hope for an end to the pandemic, and a return to economic and social normalcy, in 2021, interest rates are likely to stay at their near-zero levels for the foreseeable future. Every dollar will count for retirement-savers.

This year’s presidential election and COVID-19 have reminded us that many things are out of our control. But the power to help millions of Americans save more for retirement is in the hands of plan sponsors.

With rates likely to remain low, investors, and especially participants in sponsored 401(k) plans, need every dollar they can save to achieve their goals in retirement.

Defined contribution plan participants will seriously diminish their retirement savings if they prematurely cash out all or part of their 401(k) savings account balances.

Years from now, terminated employees may discover they have less income in retirement due to an automatic rollover or automatic cash-out from a previous employer.

The lack of seamless plan-to-plan asset portability prevents participants from easily moving and consolidating their 401(k) savings, leaving them open to the temptation to prematurely cash out their 401(k) accounts from prior employers’ plans.

The CARES Act waiver of penalties for premature 401(k) withdrawals may hurt the very American workers and families the Act is supposed to help.

With hardworking African-American and Hispanic workers far more likely to cash out than other participants, our nation has a serious retirement-saving crisis on its hands.

Most job-changing participants migrate to employers with large health plans, but account consolidation can help both companies reduce their plan fees.