Helping Employees Save Through Life’s Busiest Years

Make retirement saving easier with automatic plan features

Mid-career employees have a lot on their plates. They’re juggling families, careers, mortgages, and caregiving. As financial demands multiply, immediate obligations often take precedence, while future saving goals, like retirement, may get deferred.

Three out of four Millennials and half of Gen X employees say competing financial priorities are limiting their ability to save for retirement.¹ For employers, this means that many employees may not benefit from retirement plan features unless the plan is designed to make saving automatic.

Fortunately, thoughtful plan design can do much of the heavy lifting. For employees in the messy middle years, the most effective retirement plan designs are those that don’t require them to do anything at all.

Let the plan design do the work

The financial demands of mid-career life leave little bandwidth for actively managing retirement savings. Decision fatigue is real, and employees who intend to enroll, increase contributions, or re-engage with their retirement plans often never get around to doing it. One way for plan sponsors to support better retirement outcomes is by establishing strong default options and implementing automatic features.

Make saving a default, not a decision. For employees who are too stretched to research plan options and fill out enrollment forms, automatic enrollment removes the first and tallest hurdle: getting started. According to Vanguard’s 2026 How America Saves report, plans with automatic enrollment achieve a 94% participation rate, compared with 64% for plans that rely on employees to enroll on their own.²

Keep savings growing. Busy employees rarely revisit their contribution rate once it’s set. Using automatic escalation to raise that rate gradually can help grow savings without requiring employees to act. Vanguard reports that 59% of plans now offer automatic escalation, helping employees steadily increase their savings over time without having to take action. Participants who remain in automatic enrollment plans for 10 years or more have substantially higher account balances than those in voluntary enrollment plans, illustrating the long-term impact of automatic features.³

Together, these features allow employees to build retirement savings consistently, even during life’s most demanding years.

When employees save, employers benefit

Automatic features aren’t just good for employees. They deliver value to the companies that sponsor retirement plans. Potential benefits include:

A more engaged, productive workforce. Financial stress follows employees to work. When saving happens automatically, employees may notice that their retirement plan is helping them build wealth. This can lead to less worry and greater focus at work. Of note, employees notice when their retirement plan is helping them build wealth.

More predictable workforce planning. Employees who can’t afford to retire often don’t. Improving retirement readiness helps employers avoid higher benefit costs, as well as dissatisfaction among younger employees who may encounter career bottlenecks.

Simpler plan administration and more room to save. When participant deferrals are higher, retirement plans pass nondiscrimination testing more easily, and highly compensated employees may be able to maximize their retirement savings.

The details determine the outcomes

When employees are stuck, plan design can help move them forward. Inertia is powerful, but it works where the plan points it. A plan built on outdated defaults automates may increase risk of short. Sponsors who revisit a few key design choices can build momentum.

Here are some points to consider:

Set defaults with intention. A 3% default contribution rate was once standard, but many employees need to save considerably more to build adequate retirement income. Plans have steadily raised defaults, and participation in automatic enrollment plans has remained steady.

Take a cue from SECURE 2.0. The SECURE 2.0 Act generally requires most new plans to automatically enroll employees with a default deferral rate of 3% to 10% and to escalate contributions automatically by 1% per year to a cap of 10% to 15%.

Periodically re-enroll all employees. Employees who opted out years ago may intend to enroll in the future and never act on it. Periodic re-enrollment gives them a fresh start, sweeping non-participants back into the plan unless they opt out again.

Make it as easy as possible for employees. By streamlining enrollment and saving, employers can help employees overcome the challenges that can leave them unprepared for retirement.

Relatively small plan design changes can produce meaningful improvement in employees’ retirement readiness. Review your plan’s default rate, escalation cap, and re-enrollment schedule this year and contact us to discuss whether thoughtfully implemented automatic features could help your employees continue to save through life’s busiest years.

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.