The Super 401K Plan

Just in time. In anticipation of the first Baby Boomers getting Social Security next year, there's a new way to "super-size" your 401k.

The new super 401k plan is being called the cutting edge of retirement planning. But you have to be the kind of person who's able to let go and give much of the control of your money over to the plan administrator. History shows - remember those things called defined benefit pension plans - the employees weren't doing a very good job managing their investments.

This super 401k is a new Labor Department rule that promises to revolutionize the way Americans save and invest for retirement. I've long been an advocate of automatic enrollment of workers in 401k retirement plans. I've seen too many fellow workers - of all ages but especially those in their 20s and 30s - not enroll - presuming they can't "afford" to do it right now or because they "need" all the money in their paycheck. I ask them: "What don't you understand about this being a retirement plan for you, sponsored by your employer, often matching your contribution that is tax deferred and will just grove over your lifetime?"

Automatic enrollment under this new super 401k plan would get everybody in - so that they would have to consciously "opt out". It would also offer employers the right to do automatically increase the employee's annual contribution. Again - an "opt out" clause gives employees the right not to increase their contribution.

I'm all about saving money. I'm less concerned about how much you save as I am about how deliberately and regularly you save because it's the discipline of always saving that builds good money habits.