How to Increase Employee 401(k) Contributions Without Mandating Them

Encouraging your employees to contribute more to their retirement plans doesn’t require mandates or pressure. In fact, with the right strategies, you can naturally motivate your workforce to save more, leading to stronger financial futures and a more competitive company culture.

At Maxus Plan Solutions, we believe empowering employees with the tools and knowledge to make confident financial decisions is key to building loyalty and boosting workplace satisfaction. Here’s how you can encourage higher 401(k) contributions —without requiring them.

Why Boosting Employee Contributions Matters

Before we dive into the strategies, here’s why encouraging higher contributions should be a priority:

• Employee Financial Security: Increased contributions help employees build more secure retirement outcomes.
• Enhanced Employee Loyalty: A strong retirement plan shows employees that you value their future, leading to higher job satisfaction and lower turnover.
• Tax Advantages: Both employees and employers benefit from tax-advantaged contributions.

5 Smart, Voluntary Strategies to Encourage Higher 401(k) Contributions

1. Automatic Escalation

This feature gradually increases employee contributions by small, manageable increments—often 1% annually—until a cap is reached. Employees remain in control and can opt out at any time.

Why it works:

• Boosts savings without employees feeling a significant impact on their paycheck.
• Proven to significantly improve retirement savings outcomes over time.

Pro Tip: Educate employees upfront during onboarding so they understand how automatic escalation supports their financial goals.

2. Employer Matching Incentives

Matching contributions are one of the most effective motivators. Whether it’s dollar-for-dollar up to a set percentage or a tiered match, employees see immediate value when they save more.

Matching Examples:

• 100% up to 4–6% of salary
• Tiered Match (e.g., 100% for first 3%, then 50% for the next 2%)

Why it works:

• Creates an instant reward for saving.
• Demonstrates employer commitment to employee financial wellness.

Pro Tip: Regularly promote your match through internal communications and benefits materials.

3. Robust Financial Education

Employees who understand the value of early saving, compound growth, and tax advantages are far more likely to increase contributions.

Ways to deliver education:

• Monthly workshops and webinars
• One-on-one financial coaching
• Easy-to-follow digital guides and videos

Why it works:

• Informed employees make smarter financial decisions.
• Builds trust and engagement with your benefits offering.

Pro Tip: Partner with retirement planning experts, like Maxus Plan Solutions, for engaging, high-impact education tailored to your team.

4. Personalized Communication and Tools

Generic messaging won’t inspire action. Instead, provide personalized retirement calculators or future income projections that show employees the real impact of increasing their contributions.

Why it works:

• Makes the benefits tangible and easy to understand.
• Encourages proactive behavior through clear, personalized insights.

Pro Tip: Use digital platforms that show real-time savings projections based on current and increased contribution levels.

5. Simplified Enrollment and Contribution Changes

Complicated processes can be a deterrent. Make it easy for employees to enroll, increase their contributions, or update preferences.

Why it works:

• Reduces friction and encourages immediate action.
• Improves trust in the retirement plan’s usability and effectiveness.

Pro Tip: Use online tools or mobile apps that allow employees to make changes in just a few clicks.

How Maxus Plan Solutions Helps You Succeed

Boosting contributions is about more than automation—it’s about creating a culture of long-term financial empowerment. Maxus Plan Solutions provides:

• Customized Plan Designs: Tailored features like auto-enrollment, escalation, and match structures.
• Supporting Financial Education: Your plan’s financial advisor and investment recordkeeper offer effective tools to educate your employees about investment and retirement strategies.
• Efficient Plan Management: Streamlining administration, enrollment, and communication strategies, making it easier for your employees to participate actively.

Ready to Transform Your Employees’ Retirement Outlook?

You don’t need mandates to make a meaningful difference. With the right support and strategy, your employees can increase their contributions confidently and voluntarily—while your business reaps the benefits of a financially empowered workforce.

It’s time to invest in your team and your future. Contact us today, and let’s design a retirement plan strategy that works for your employees and your business.