TDFs offer participants many advantages: a simplified investment decision-making process, diversification by professional fund managers, automatic rebalancing, a glide path strategy that adjusts risk over time, and much more. Given the popularity of these funds, plan sponsors should help ensure participants understand how their TDF works to maximize their potential benefits — and avoid common missteps that can undermine their retirement strategy.

The Automatic IRA Act of 2024 has been reintroduced by Representative Richard Neal, D-Mass., the ranking member of the House Ways and Means Committee. This measure requires companies with more than ten workers to automatically enroll their workers in IRAs or other comparable automatic contribution plans, such as 401(k)s, if they do not currently offer a retirement plan. After adopting a plan, small firms may be eligible for the current startup tax credit or a recently proposed $500 tax credit for three years that is only applicable to automatic IRAs.

Effective retirement plan communications do more than just meet DOL requirements; the best ones engage, educate, motivate, and empower participants. Optimize your communications to connect with employees on a personal level, encourage informed decisions, and foster more active engagement with their retirement plan and their financial future. Effective, empathic communications help build a foundation of trust and confidence in the plan benefits — and the employer.

Retirement represents a major turning point in one's life. One factor that remains, regardless of this new chapter in your life, is the presence of taxes. If you’ve followed the advice of retirement plan advisors, you should already be saving in tax-advantaged retirement accounts.