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45-year-olds boost plan contributions

by Ginny Kipling

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Recent LIMRA research suggests 70 percent of pre-retirees, ages 55 to 70, do not consider themselves to be prepared for retirement. A newer survey shows most employees want their contributions to their defined contribution plans escalated annually once they turn 45.

Thirty-eight percent were automatically enrolled in their defined contribution plans.

Twenty-one percent had automatic escalation.

Sixteen percent had both automatic enrollment and escalation.

When posed with the idea of an auto escalation beginning at age 45:

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Twenty-two percent said would like the increase to be 1 percent every year.

Forty-five percent would want their contributions to be automatically increased by 2 percent or more every year, which is especially true for those with annual income of $75,000 or more.

Only 15 percent increased their contribution rate in the past 12 months, excluding those enrolled in automatic escalation plans.

Forty-two percent have never changed their DC investment line-up, which is particularly true of 25-45 year olds.

Source: LIMRA