5 Ways Your 401(K) Is Helping You Save Better

These retirement plans are adding new features and services that make it easier to build a big nest egg. But sometimes you should turn away the helping hands and make your own choices.

- Penelope Wang

Over the past 10 years, a quiet revolution has been transforming the 401(k) landscape. As a result, you’re probably saving more consistently and investing in a smarter mix of stocks and bonds, maybe without even knowing it. Employers are increasingly automating financial moves that you might otherwise drag your feet on—who really remembers to boost his contribution percentage every year? And they are offering optional counseling and a variety of nudges—such as retirement readiness scores and prompts to use online calculators— to help you avoid coming up short in later life.

The new benefits are not simply an altruistic gesture from your boss, of course. Some 52% of workers feel financial stress, and 20% of those earning $100,000 or more have trouble meeting household expenses, according to a 2016 PwC survey. That can adversely impact the bottom line: Financial pressure is causing some 60% of employees to have difficulty focusing on work, according to the International Foundation of Employee Benefit Plans, and it is also associated with higher absenteeism.

Meanwhile, workplace savings plans like 401(k)s are playing an even larger role in Americans’ retirement preparations as old-fashioned pension plans, which require no action on your part, have become rare outside the public sector. Over the 35 years through 2013, the percentage of private industry workers covered by a 401(k) and not a pension rose from 7% to 33%, according to the Employee Benefit Research Institute. The percentage who had a pension plan, either with or without a 401(k), fell from 38% to 13%. That makes it all the more important for you to make the right moves with your 401(k).