The Robovisstatistics on Americans' lack of retirement readiness can be startling, with almost 1 in 3 older workers approaching retirement without a dime socked away. Now, one company is dangling a carrot it hopes will get more people saving: up to $250 in cash if they put money into a 401(k).

The new incentive is from a fast-growing administrator of 401(k) plans, Human Interest, and focuses on a little-known portion of the Secure 2.0 law passed last year. The provision allows employers or plan providers to offer financial incentives that encourage employees to put money into their retirement plan. 

Human Interest said it's the first time that a plan has offered a 3% cash-back reward to retirement savers. Though other companies may have financial incentives to boost retirement spending, it's usually through matching contributions. For instance, Robinhood sought last year to attract people with an IRA by dangling a 1% match for those who opened retirement accounts at the trading app. 

The 3% cash-back plan is akin to credit card companies giving cash-back bonuses for spending, or even similar to banks that used to give toasters away to people who opened an account with them, noted Human Interest CEO Jeff Schneble. Companies have sought for years to provide other incentives to get workers to save, such as automatic enrollment or matching contributions, and yet a large segment of Americans still fail to save, he noted. 

• Good savers, beware: Will you face a tax bomb in retirement?
• Inflation Reduction Act could be "game-changing" for millions of U.S. seniors
• Is retirement achievable? Investors say they'll need at least $3 million.

"There just hasn't been a lot of new innovation or thinking — it's all kind of the same stuff we have been doing for 40 years," Schneble told CBS MoneyWatch. "It works for half the people and doesn't work for half."

Plan limitations

Human Interest's plan has some limitations. For one, it's only accessible to people who work for the 16,000 companies that have 401(k) plans through the company. In other words, people who want to open up an IRA or other type of individual retirement account to get the cash-back offer are out of luck. 

Human Interest is providing the $250 cash-back offer to middle- and low-income workers who earn less than $60,000, which represents roughly half of the employees who have 401(k) plans through the company, Schneble said. The company picked that number because it's about the average income for workers.

"What we saw, not surprisingly, is the savings rate goes from 80% in the top quartile [of income earners] to 20% at the bottom quartile," he added. "Those who make less, save less."

To receive the money, workers must initiate retirement contributions between June 1, 2023, and January 1, 2024, and contribute at least 8% of their salary to their savings for a 12-month period. Once the worker qualifies for the cash-back offer, they'll receive the award through a Visa or Mastercard prepaid debit card or similar gift card. 

"If we could get 5% to 10% of people saving for the first time, that would be amazing," Schneble said.

In:
• savings