NEW YORK (8/19/14)--More than a third of workers who have employer-sponsored retirement plans haven't upped the percentage of their contributions, and 26% haven't increased their contributions in more than a year.
Financial services provider TIAA-CREF surveyed more than 1,000 adults about their retirement intentions and found that 53% were not automatically enrolled in their companies' plans.
Between lack of participation and lagging savings--44% of U.S. employees save 10% or less of their annual income each year--employees are losing opportunities to solidify their retirement funding, the study noted. Credit unions can provide critical financial planning for their members long before the retirement party is planned.
The survey also found 57% of workers did not increase their plan contribution after their last raise, citing a need to cover immediate expenses. One-quarter of respondents said they were already contributing the maximum so they did not make any adjustments after their last raise.
More than half of workers age 18-34 were more likely to increase savings after a raise, and of those Millennials who didn't bump up contributions, 23% said they were contributing the maximum amount allowed.
"Plan sponsors should be proactively looking for opportunities to engage directly with employees about their retirement savings, especially during pivotal times such as benefits enrollment season and after an employee receives a raise," said Teresa Hassara, executive vice president, TIAA-CREF's Institutional Business. "Reaching employees at the right time with the right messaging can have a profound effect on retirement readiness."