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"The most powerful weapon in chess is to have the next move."

-David Bronstein, chess grandmaster and tactical genius.

Triangle Why Do You Have a Plan?

Published on: April 27, 2015

The question we most often ask business owners or plan sponsors is “why do you have a plan?”

Charlie Epstein, author of Paychecks for Life — How to Turn Your 401(k) into a Paycheck Manufacturing Company, illustrates the point really well with the following scenario:

“Imagine you are about to board an airplane at Bradley International Airport. Your destination is Los Angeles. As you are checking in at the gate, the agent comes on the PA system and says, “ladies and gentlemen, I have an announcement to make. The captain and the FAA want me to let you know that there is an 85% chance that this plane will not make it to your final destination on time and safely. Have a nice flight!”

After hearing that announcement, would you board that airplane? Unless you had a death wish, I would imagine not. The probability of success (15%) is nowhere close to justifying the level of risk this scenario poses. Now, let’s land the metaphor. Replace the plane with your company-sponsored 401(k) plan. The reality is you’re “boarding” your employees and their financial future onto a plan where there’s an 85% chance they won’t successfully arrive at their destination. This is not good odds for them or a good reflection on you.

So, I’ll ask you now: why do you have a plan? If your answer is “because I have to” or “to look competitive for job-seekers,” I’m going to have to tell you that’s no longer sufficient. As a plan sponsor, you are safeguarding 401Ks, and those are the second largest asset that a participant will ever have. You need to be focused on how you can help participants be retirement ready—teaching them that every decision they make today impacts the success of their outcomes for tomorrow.

We understand managing your employees is probably not your only responsibility. You have many roles and being a plan sponsor—a good plan sponsor—can require specialized knowledge and training that may be outside of your skillset. In order to get your employees and their 401(k)s where you want them to be, you might need help. The good news is there are professionals out there who have training, knowledge and the staff to support you—including the professionals at Nicklas Financial.

We would love the opportunity to sit down with you and discuss how we can help you and your employees, but even if you’re not ready to commit to that yet, we still want to help you. In the coming months we will be doing a series of blogs providing steps that can help you put your employees on the path toward retirement readiness, so stay tuned in.

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Written by Brandon Nicklas
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