A report released Wednesday by Nyhart, an actuarial and employee benefit consulting firm, found the main reason employees are unable to retire at age 65 is that they aren't contributing enough to their 401(k) plans.
The vast majority – 81% – of workers surveyed will not be able to retire at 65; in fact, the new retirement age has been pushed to 73 for the average employee relying on his 401(k) as primary retirement income.
Simply increasing the amount they contribute may not be enough, though. Workers older than 55 will have to contribute over 45% of their income to retire in 10 years. For workers between 45 and 55, contributions should average 19% of their income to retire by 65.
"An employee's level of contribution is the single greatest factor in determining if they will retire on time," the report authors declare. "It is also the only major factor the employee controls in the overall investment return."