What is automatic enrollment in a 401(k)?

If your plan has automatic enrollment, your employer is setting your default savings rate in case you don’t take action to defer a portion of your paycheck to your 401(k). Your contributions to your 401(k) will be invested in an age-appropriate portfolio based on your expected timeframe to retirement. You can log in to your account to change both your savings rate—including choosing not to contribute at all—and investment selections at any time.

In general, employees at companies whose 401(k) plans are set up with automatic enrollment are more likely to participate in the 401(k) plan. Many employers are now choosing this option so that they can help more employees get the ball rolling on saving for retirement while still giving you full flexibility to pick the right rate for you.