The stock market seems to be going pretty crazy lately. But hey, I’m not going to get into any economic or political speculation here. No way. I mean, you can get that on cable news all day long and in a more entertaining way.
What I’m thinking about is how, regardless of the ups and downs in the economy and politics and whatever else, we all have to have our retirement saving plans together. You do, right? Oh, you don’t?? I can’t say I’m surprised. You’re just like about 70% of American workers, who also don’t have plans or aren’t on track to retire. Kinda makes ya think, huh?
At Intel, we’ve been thinking about it. A lot. That’s one reason we recently made some changes to our US retirement benefits – to help employees prepare for retirement. When you are hired at Intel, we set a default 3% contribution to your 401(k) to get you started off on the right track. You can raise that contribution or lower it depending on your personal situation, but we are definitely trying to do our part to help you get started.
The other thing we’re doing is “going big” on what we call Target Date funds. These are investments in our 401(k) that have a pretty cool design. The basic idea is that the fund managers adjust risk & return over time and they’re named based on the year you plan to retire; for example, TargetDate2025. The funds you’d choose early in your career have a higher risk & return strategy because you have more time to weather the stock market’s ups and downs (seen any of that lately?). As you get closer to retirement, they ratchet down the risk & return so you have a more secure pool of resources to live on.
I don’t want to say Target Funds are “set it and forget it” because that’s oversimplifying, but you can pretty much “set it and rebalance it a couple times a year”. However, that doesn’t rhyme… So let’s just say these funds are for people who want to save but can’t or don’t want to spend a ton of time managing their investments.
If you want to be a bit more hands on with your 401(k) investments, there’s a pool of about 15 choice mutual funds that you can get into very easily. And if you’re really comfortable with choosing investments, there’s a way to get access to literally thousands of different mutual funds for your 401(k). Basically, Intel wants to help you with whatever your approach to get ready for retirement.
I know. You’re thinking, “Retirement? That’s like forever from now.” Okay, maybe it is a ways off for you, but I would call your attention to the magic of compound interest. At Intel, we’ve learned that it really pays to help our employees start saving early so they can retire on time and in the manner to which they have become accustomed – for example, watching cable news all day long. Or perhaps you have better things to do…