The new Dream Forward 401(k) plan attempts to address some of the problems that occur with traditional plans by offering a simple, easy to understand plan that costs less. Grant Easterbrook, one of the founders of Dream Forward, said, “We founded Dream Forward to create a low-cost, transparent, modern 401(k) service.” The new plan is designed to revamp the 401(k) experience, allowing workers to take all of their financial goals into consideration and shows them how they can afford to save for retirement now. instead of putting it off.

Expensive 401(k) plans are still the default retirement plans for thousands of companies and millions of workers. The problem with these 401(k)s is that they can be confusing for the average consumer without a finance background. People don’t understand how 401(k)s work and the way 401(k) providers present the plans doesn’t reflect how people think about retirement in real life. In a video made by Dream Forward to highlight the difficulty some people are facing, the participants were asked simple questions about their retirement plan, including what company administers it or what the fees are, and most are unable to answer correctly.

Many workers neglect saving for the future and prioritize reaching short-term goals over aiming for their long-term retirement goals. When people think of their finances in real life, they’re thinking about how they need to save for immediate goals like a house or a car, not something that is decades away. Saving for retirement isn’t a priority until they realize that they are getting close to their target retirement age and find that they do not have nearly enough money to retire comfortably.

The new Dream Forward 401(k) plan allows participants to balance retirement savings with their short-term financial goals. Dream Forward incorporates those goals into the plan by asking participants about their goals and timelines during the enrollment process. Then, the Dream Forward 401(k) plan shows them some basic paycheck reductions that allows them to save from each paycheck for their car goal, for college savings, and other goals as well as how much to save for retirement. The Dream Forward plan is currently only open to participants by invitation but a full rollout of the program is expected to be completed within the next four months.

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