SURVEY SAYS: Annually Increasing Retirement Savings

We covered a survey which found 28% of Americans are saving more for retirement this year compared to last year.

Last week, I asked NewsDash readers, “Do you bump up your retirement savings each year, or does your employer do it for you? Also, if you do not increase your savings each year, why is that?”


We had responses from people in all roles of retirement plan administration. The majority (55.6%) are in a plan sponsor role, 14.3% are advisers/consultants, 22.2% are TPAs/recordkeepers/investment managers, 4.8% are CPAs and 3.2% are attorneys.


The majority of respondents (54.7%) do NOT increase the amount they save for retirement each year. However, 40.6% say they do so themselves, and 4.7% say their employer-sponsored retirement plan automatically increases their deferral amount each year.


When those who do not increase their savings each year were asked why, most (57.8%) cite already being maxed out on the statutory limit they can save. Three in ten (31.1%) cite other financial priorities, such as debt, saving/paying for a child’s education, medical bills, etc., 20% selected “I don’t have enough income to do so,” and 17.8% say they feel they are saving enough.


The need to put savings into an emergency fund was the reason given for 13.3% of responding readers, not wanting to sacrifice things that add to their quality of life was cited by 2.2%, helping out adult children or elderly parents was selected by 4.4%, and 2.2% blamed it on the “spending habits of myself or spouse/partner.”


In comments left by readers, many noted that they increase their retirement plan deferral percentage when they get a raise; however, others said the raises are paltry and health benefit costs continue to rise, so it’s hard to save more. Some shared their strategies for saving, such as making deferrals to get the maximum match, putting other savings into a health savings account (HSA) or switching from pre-tax to Roth deferrals. And for some, their increase in savings occurs in vehicles other than employer-sponsored retirement plans. Editor’s Choice goes to the reader who said, “Assuming we get wage increases every year, maintaining a fixed percentage deferral would increase what we save in absolute dollar terms…now let’s just get those wage increases to be more than 2% to 3% and we can see a real difference.”


A big thank you to all who participated in the survey!



I increase my contribution by the amount of my pay increase and bonus.

I always tell my employees they should save, save, save until it hurts. Then you know you are saving enough!

I increase every year to reach the 402(g) limit. I do not want to outlive my retirement savings.

Living somewhat cheaply, including driving an 11-year old SUV helps me save for retirement!

Thankfully, I was able to pay off my large debts early in life (house, college), so I can max out on my 401(k) now that I am within 5 years of retirement!

Increase enough to reach the maximum allowable contribution each year.

Saved enough to maximize match. Combined with mortgage payments, that made us a little bit cash-poor. A recent windfall has provided a cushion, so I now defer the legal maximum.

I try and up my contribution percentage coincident with my yearly raise to lessen the sting!

While I don’t increase my % savings into my company sponsored 401(k) as my salary increases my savings increase. I am also saving more each year dollar wise outside of my plan; Roth IRA and brokerage.

Our company is a safe harbor so will increase employees automatically each year until they hit 10%, but then if employees want additional increases they must do so manually.

I have increased the past 5 years in both Roth and Non-Roth, this year I may simply migrate from Non-Roth to Roth.

I start at 8% and with match it brings me to about 11%. I struggle to pay bills even at that level for me and my family as everything else increases except my pay…

Working with retirement plans over many years has been enlightening and certainly played a role in motivating me and my family to focus on saving. Having a plan for how we were going to pay for our son’s college education and not taking a loan from our 401k(s) to do so, I attribute to the years I have spent on the business side of working with 401(k)s and as a plan sponsor in my current role.

With the increase of market volatility, why would I save more to lose more? Doesn’t make any sense to me at all

Assuming we get wage increases every year, maintaining a fixed percentage deferral would increase what we save in absolute dollar terms…now let’s just get those wage increases to be more than 2% to 3% and we can see a real difference.

I’m a few years away from retirement, and I have been saving and investing for decades, following the early advice of my then-boyfriend (now husband!) who also has been saving and investing for decades. I believe that between the two of us, we will have sufficient income.

As budgets get tight, employers are lowering their contributions to employee retirement programs so I am forced to make up the difference personally, which causes some stress on the personal budget but hopefully a more stress-free retirement.

My employer has an automatic contribution increase feature, but my contribution level puts me above this automatic feature (i.e., it’s only up to about 9% I think). I adjust my contributions based on my income (e.g., bonus varies greatly) and other financial commitments.

While I don’t increase my retirement savings each year, I have increased the percentage to more than what is needed to receive my company’s match. In addition, we have been saving into my husband’s IRA each year.

With a paltry 1% or 1 1/2% annual “merit” increase (when the company even offers it) and health insurance premium payroll deductions increasing at 10% or more each year, how can I (or anyone else) be expected to annually increase our retirement savings rate when we are falling behind year after year? I put in enough to get the max match; and have recently begun depositing any spare change into the HSA. Still catching up from 2008 as I am sure many of us are.

Generally, if my income increases, then I would increase my savings.

SAVE! SAVE EVEN MORE! That’s basically the message we send out each year, and it’s worked on me 🙂

If you are not on an employer health plan, the cost of medical premium alone may eliminate opportunities for additional savings. Our premium has literally doubled the last two years. For two people, we are paying over $2,100 per month for just the bronze plan. Makes it more challenging to save additional dollars.

The article says “only” 28% increased? That sounds like a huge success, not “only”.

My employer does do auto increase of 1% each year until employees reach 10%. I am currently at 15% plus the employer match of 3% for I’m saving 18%. However, I probably should bump it up.

My employer has stopped giving annual salary increases. Expenses continue to rise and the money has to come from somewhere.

We contribute the maximum with the qualified plan but still try to take some action each year to enhance our retirement savings picture. This year we did a Roth conversion to increase that portion of our retirement savings picture. It’s a tax hit, but we can handle that easier now than once we’re retired.

I am getting very close to retirement, so next year instead of increasing my contribution to my 401(k), I am going to increase my contribution to my savings account. The stock market has been too good for too long and I don’t want to take the chance of losing too much if it crashes so close to retirement.

My goal is to retire at age 56 and increasing my retirement savings each year gets me to my end goal. If you are getting a salary increase each year, it is a “no brainer” that your retirement savings should get a piece of that increase.

I max out 401(k) contribution, including catch-up, max Roth IRA, and contribute to personal savings. I aim to pay off my mortgage and retire debt free.

Our auto increase feature has made a big difference for our plans. Participants historically rarely increased their percentage. Now they have to take action to not have it increased, which they don’t do.

The employer I work for has an auto-increase option, but whenever I feel like I could add another 1% to my 401(k) contributions, I do. I have a spreadsheet that shows that each 1% only decreases my take home pay by ‘x’ amount, so when I feel like I can afford to have that additional amount come out, I increase my contribution amount. And I never decrease my 401(k) contribution amount.

I actually reduced my retirement savings this past year. As I get closer to retirement, I’m feeling the need to increase my HSA contributions, so the reduction in retirement balances out. But, I wouldn’t “rob Peter to pay Paul” unless I felt that my retirement savings was already on target.

We recordkeepers hate auto enroll, but boy, it sure works to increase savings.

I’ve maxed out my match, and then I prefer to use a self-directed IRA brokerage account to save more.

Contribute to the 401(k) to get the full match. Then max out the HSA, then contribute anything additional I can to the 401(k).

I increase my savings each year when we get our raise by 1% and will keep doing so until I hit the maximum.

No change in pay for 7 years while all other expenses continue to increase, makes it hard to save.

As a pension consultant and DINK (double income, no kids) I have always contributed the maximum allowed for both pre- and post-tax accounts. My increases to savings come from regulatory increases.

I’ve been contributing the max that Uncle Sam will let me put away for years now. With luck, one day I’ll get to spend it…



NOTE: Responses reflect the opinions of individual readers and not necessarily the stance of Strategic Insight or its affiliates.