Fidelity analyzed the balances of those who remained invested in their 401(k) in the decade following the Great Recession of 2008 and found that the balances went from $52,600 to $297,700.
And the use of 401(k) loans fell to a nine-year low of 22.5% in 2018, according to T. Rowe Price’s annual participant data benchmarking report.
Starting people off with a deferral rate of 3% is actually a disservice, experts agree.
While automatic enrollment gets participants into plans, a sizable segment are starting their average contributions at a minimum 3.3% rate and failing to take any additional action to increase that, according to J.P. Morgan Asset Management.
In addition, a person invested in a stable value fund versus someone invested in a target-date fund could end up with a balance as much as 59% lower, BlackRock says.
Workers under age 35 are realizing they need to start saving now, according to Ascensus.
However, only 33% are confident about their retirement readiness.
Their use of an adviser acting as a plan fiduciary has increased by 40% in the past four years, according to the Plan Sponsor Council of America.
If combined with the Automatic Retirement Plan Act of 2017, the retirement savings shortfall would be reduced by $932 billion, or 22.6%, according to EBRI.
Fifty-two percent think they will be able to retire at their ideal retirement age, and 52% say they either somewhat or strongly agree that their savings will last throughout their lifetime.
To help employees achieve their savings goals, 82% of sponsors are making changes to plan design, and 83% are updating their investment menus.
The “Less Is Not More” study set out to determine whether presenting retirement plan information in a more compact and accessible way increases participation and results in better investment decisions.
Additionally, the number of plans with an initial 6% deferral rate for automatic enrollment now surpass those with 3% as the initial rate.
Men are saving an average of 8.9%, and women, 6.4%, PenFed Credit Union found in a survey
Only one-third are participating in their retirement plan
The number of participants taking hardship withdrawals remained less than 1%.