According to a recent report from CNBC, the average American is saving less money for retirement than they did a year ago, with fewer than one in five American workers saving more. In a recent Bankrate.com survey, it was reported that 10% of people haven’t put any money into their retirement accounts in the past two years. This is the highest percentage of non-contributing participants since Bankrate began its surveys in 2011.
That being said, the percentage of workers who are saving less for retirement is down from 18% to 14%, while people who are saving more saw a bump from 18% to 19%, from 2012 until now.
In addition, CNBC reports that larger companies are encouraging their employees to save for retirement. They have started to enroll employees in company-sponsored 401(k) plans, while slowly and automatically deducting more and more from overall salary to contribute to the fund, assuming employees don’t opt out.
Bankrate’s chief financial analyst, Greg McBride, commented, “The retirement savings burden has increasingly shifted to workers. Automatic enrollment and automatic escalation are two ways employers can help improve savings rates.”
However, only 54% of employers offer automatic enrollment, and Stephen Wendel, head of behavioral science at investment research and management firm Morningstar, says “Automatic enrollment and automatic escalation are powerful tools, but they are not perfect.”
Wendel continued, “There are no magic wands. Employers have different populations of workers and must design retirement plans attuned to their particular needs.”
Saving for retirement is important, but it’s also essential to maintain your health when entering retirement age.
If you’re planning on retiring in the next few years, talk to your employer about any possible options you may have to increase your retirement savings, or what kind of retirement healthcare plans they may offer.