Do 401(k) plans positively impact employee retirement savings? Let the statistics speak for
themselves.
“According to the Employee Benefit Research Institute (EBRI), more than 70% of employees earning between $30,000 and $50,000 participate in a 401(k) plan when it is offered to them at work, while fewer than 5% of those same employees save on their own in an IRA when they are
not covered by a workplace retirement savings plan.”i Such a startling difference in outcomes is attributed to the convenience of payroll deduction of a 401(k) plan, the culture of savings that such a plan creates, and, frankly, the inertia of employees—once enrolled they tend to stay enrolled in the 401(k) plan.