April 30, 2013 (MMD Newswire) — As businesses look for ways to cut expenses and increase profits, it appears that more businesses are stopping the match on their 401k plan. A surprising, new survey shows that since 2009, the number of companies that make a 401k match has actually decreased by almost 7%. This means that a growing number of employees must now create investment alternatives to build up their retirement nest eggs.
According to the 401k Performance Survey, an independent study by American Investment Planners LLC, approximately 5% of 401k plans, or an estimated 13,811 plans, stopped matching in 2010, the first year the dramatic decline began. An additional 2% stopped matching in 2011. The stock market crash of 2008 and the recession were likely factors.
Brett Goldstein, Director of Retirement Planning at American Investment Planners, LLC based in Jericho, New York, said, “Clearly as businesses look for ways to lower expenses and improve bottom lines, it is not surprising that businesses have stopped matching. I have been studying this trend for the past four years and don’t see the trend abating any time soon.” The American Investment Planners 401k Performance Survey also showed that 42% of businesses did not match their 401k in 2011.
“Not only are companies cutting the 401k match, but an almost equal percentage of companies are terminating their 401k plans.” says Brett Goldstein. “Since 2009 approximately 6% of 401k plans have been terminated. To make matters worse, the number of traditional defined benefit pension plans decreased by 15% in 2011.” With companies going out of business due to the recession and the continued rise of health insurance premiums, companies have either stopped matching or terminated their retirement plan.
Without company-sponsored retirement plans like 401ks or employer matching to help save for retirement, employees will need to set aside their own money for retirement as well as develop their own investment strategies. Goldstein is recommending to clients that they work with a trusted financial advisor who can help set up alternative plans like IRAs, Roth IRAs and annuities.
One other surprising finding from the survey was that the average 401k lost 2% in 2011. “In my experience working with 401ks, most employees are unaware of the performance in their 401k and may not have realized that they lost money.
About Brett Goldstein
Brett Goldstein is Director of Retirement Planning at American Investment Planners Planners, LLC based in Jericho, New York. He is an author, speaker and media personality who specializes in providing businesses and individuals with affordable retirement planning solutions. Goldstein’s timely advice and tips have been featured on Fox Business Network, Kiplinger’s, Forbes, Wall Street Journal Radio, MarketWatch.com, New York Daily News, The Chicago Tribune, and many others.
Brett Goldstein is available for interview: In the Greater New York City area; nationwide by arrangement.
Email: [email protected]
Phone: 516-346-2999 or cell 516-314-3289
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