Paying More Attention to Retirement…For Nonprofit Workers

Since I started my first job, I've been consumed by the thought process of saving for retirement. I really don't have a good reason as to why, but from that first paycheck I was always trying to maximize the amount of money I could save in retirement accounts. When I was a leader both in the practitioner side as well as the consulting side, I was always preaching to younger people the importance of saving, particularly when they were at their youngest professional ages. Seems like people are beginning to pay attention much more so than they used to.

 In a survey conducted by the Pan Sponsor Council of America, which is part of the American Retirement Association, data shows dramatic increases in retirement planning. First, employers are contributing a much higher match to employees in their retirement accounts (A 403b is the same as a 401K but for government and nonprofits).  The nearly 24% increase from 2021 is an indication that it's becoming a more important aspect of the benefits program for nonprofit employees. On the employee side, individuals who contribute to their retirement accounts increased by nearly 16%. And when adding both employer and employee contributions, contribution rates went from 7% to 20% overall. As encouraging was the increase of financial literacy of nonprofit employees, up two plus percentage points overall.

I'm certainly not anyone who's going to indicate that there's a catastrophic issue to come regarding investments or retirement. But there's going to be changes. The current long-term situation regarding Social Security is not tenable without adjustments. As a result, the more you control your own retirement savings, in particular when you're younger, the more options you'll have when you want to retire.