More than half of retirement plan participants favor automatic annual increases to their contributions, according to a new report. American United Life Insurance Company (AUL), a OneAmerica company, released this finding in a survey that polled visitors (7,545 plan participants) to OneAmerica’s retirement plan participant website. The research aimed to better understand behaviors and resources that might help plan participants for retirement.
Fifty-five percent of retirement plan participants who took AUL’s survey said they would favor automatic annual increases to their contributions, the report shows.
“With non-stop family, health and life events and changing financial obligations over the course of one’s life, saving for retirement can easily fall to the bottom of the priority list,” said Marsha Whitehead, vice president of marketing for retirement services for the companies of OneAmerica. “Automatic features can help plan participants easily increase their retirement contributions and not get distracted by other financial matters.”
Survey respondents ranked several financial priorities that compete with their retirement account contributions including:
- Paying off debt (29 percent)
- Day-to-day expenses (23 percent)
- Taking care of family (11 percent)
- Saving for college (4 percent)
“Automatically increasing the contribution amount each year helps address inflation and cost of living increases,” says Whitehead. “We want to encourage participants to save as much as they can for retirement. When coupled with educational tools and materials, a feature like this can really help participants stay focused and disciplined in planning and saving for retirement.”
“With 29 percent of respondents unsure how they feel about auto-increase features and 19 percent saying they would opt out of the feature, we still have work to do to educate consumers about the importance of calculating how much retirement income they need and contributing enough to their retirement accounts to meet those needs,” adds Whitehead.
This summary infographic provides survey methodology and additional insights.