Small Change Adds Up

I have always valued saving for the future. Saving for a retirement plan is especially crucial today. When I first started my career, pension plans were on the way out. They have been replaced with 401(k)’s for the most part now, but having a 401(k) plan doesn’t mean we are going to participate! This problem of having too few making 401(k) contributions lead to a new provision that allows employers to start qualified employee contributions at 3% immediately. The employee can change that, but many don’t. It got me to thinking a bit. Why are employees that previously did not participate in their 401(k) – despite being asked – accepting an automatic enrollment?

This reminds me of a time when charitable contributions were automatically deducted from employee’s pay – especially in the banking industry. When joining the bank initially, employees were automatically signed up to contribute to an employee welfare fund and possibly to United Way or something of that nature. No one thought anything of it, and the employee could always change their level of participation. But, most employees did not make any change.

I think it speaks to human nature. The bottom line is that the amount deducted from the employee’s paycheck was not missed. We all just adapted. Believe it, or not this was the thinking when we implemented the EZ SAVER option within our MyGenPerks checking accounts. With the EZ SAVER account rounding, you are given the opportunity to round up the change from your debit transactions to the nearest dollar. Then, the remaining change can be deposited into your savings account or deposited into a local charity’s account of your choosing. Believe me; you’ll never miss the change!

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