Companies are good at selling many things to Americans. Unfortunately, selling good saving habits is not one of them, according to an article in the Wall Street Journal. The article explains why it is so difficult to change the non-saving habit and offers suggestions on what can be done about it. Some examples include:

Make saving automatic – Automatic enrollment helps employees overcome their savings inertia by automatically enrolling them into their company’s 401(k) plan when they become eligible. Programs that have employees commit to increasing their 401(k) contributions are also helpful.

Schedule Savings – Just as people schedule exercising into their day, they should also schedule savings, whether it be weekly, monthly, etc. People should find out how much they need to save, write it down and how they are going to save it. From there, they should schedule set times to examine their progress, for example on their birthday or every January 1st.

Negative images work better than positive ones – Many companies try to get employees to save more by using positive imagery (i.e. retirees traveling to exotic places), but these have not been shown to work. Instead, people tend to respond more when they think something negative will happen to them if they don’t save enough.

While it remains difficult for people to change their saving habits, NADART offers tools to help Plan Sponsors do just that. In addition to offering plan features such as automatic enrollment, online account access, and the Roth 401(k) feature, our Web site is a good source of information for participants with links to enrollment materials, investment information, retirement planning articles, plus retirement planning calculators.

If you would like to learn more about NADART’s retirement plans and the services we offer, please contact a NADART representative at (800) 462-3278 ext. 7161 or e-mail nadart401k@nada.org.