It is amazing to note when auditing retirement plans how frequently we see that many employees either do not contribute to their plans or contribute less than $50 dollars per month. 

One of the most important things participants can do is contribute to their plans early! If you wonder why this is true, here is an example for you:

A contribution of $100 per month for any 40-year period will turn into more than $700,000 (at 11% average).  However, if the employee waits 10 years to start contributing, this amount would only be $265,000 - less than half of what could’ve been earned over a 40-year time frame!  Further – if the employee turns that same contribution over forty years into $500 instead of $100 each month, the account balance grows to over $3.5 million! These numbers can be staggering when you think about what you are leaving on the table by not participating in your own retirement plan.  Many employees are not aware of how crucial contributing early is to their plans or how much of a difference a 10 year start can make in their retirement future. 

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If companies simply educated their employees on how important it is to begin contributing early, it could make a huge difference 30 or 40 years down the road.  In addition, once time is lost, it can never be completely recovered.  Even excess contributions in the future will not make up for years of lost interest on a participant’s account balance. 

Companies that truly care about their employees want them to have a successful retirement. That means they should offer educational tools to the staff throughout the year as well as offering incentives to get them to enroll in the plan early and contribute as much as possible!