A survey by American Century Investments found that most DC plan participants regretted not saving enough — notably in the first five years they worked — but also wished that they had received more guidance from their employers in helping them save more.
The third annual American Century National Survey of Defined Contribution Plan Participants, conducted by Matthew Greenwald & Associates in February 2015, found that 73% of participants said they could have saved at least “a little more” than they had since they began working, with a large majority saying that it was in the first five years they worked when they could have saved much more for retirement. As a result, many participants voiced regret at not saving more, which was consistent with the first two surveys on the topic by American Century.
Participants gave themselves higher marks on their retirement plan investing moves than on saving enough. Still, only 12% of pre-retirees (age 55 to 65) strongly agreed with the statement, “I knew very well what I was doing” when it came to investing their retirement plan money; 11% of younger participants (aged 25-54) said the same.
What would have led them to save more, even at an earlier age? The top vote-getter among both pre-retirees and younger workers was to receive “projections of what employees might accumulate by the time they retire,” followed by “annual reviews that show how on track employees are toward their retirement goal” and “showing the income that various levels of savings will produce in retirement.”
Respondents voiced support for a scenario under which employers would automatically deduct 6% of their checks and place the proceeds into their retirement plan—68% of younger workers and 69% of pre-retirees. In addition to favoring auto deductions, respondents also voiced approval of auto increases. And members of both age groups agreed that their employers could have done more to encourage them to save more for retirement.