For many workers, retirement plans can feel like a minefield of baffling terms. From 401(k) to 403(b) and Roth IRA, just attempting to understand available options can create confusion that can impact an employee’s ability to build a comfortable nest egg.
That could mean trouble for the future. One 2017 study by the Center for Retirement Research predicted that, compared to previous generations, a larger share of retired Gen-Xers and millennials will be unable to replace at least three-quarters of their pre-retirement earnings, putting them at greater risk for financial insecurity during their twilight years. Another 2021 study of Gen Z workers by Empower Retirement found that while retirement plan enrollment among this group outpaces that of other generations, their savings rate averages 6% — lower than any other group.
