More American workers have increased their retirement savings this year, according to a new study by Bankrate.com.
As many as 21% of people surveyed are saving more for retirement than last year, a new record-high percentage in Bankrate’s Financial Security Index. The study also finds that fewer people are choosing not to save anything for retirement. Just 5% didn’t contribute to retirement savings this year, a new low for the survey.
Another new high this year was the amount of Americans who are saving the same amount for retirement as last year (56% of those surveyed).
Greg McBride, Bankrate.com’s chief financial analyst, says he sees these results as a sign of an improving economy.
“Both readings are indicative of an improving economy, where people are earning more and saving more,” McBride said in a statement.
In 2011, those saving less outnumbered those saving more by nearly 2 to 1, (29% vs. 15%). This year, those saving more than last year (21%) outnumber those saving less (17%).
Bankrate attributes the boost in savings to the changing retirement savings environment, including the disappearance of pension plans and the increase in automatic enrollment in 401(k)s.
According to Alan MacEachin, corporate economist with Navy Federal Credit Union, the “ongoing disappearance of traditional pension plans, and the precarious financial position of many of the remaining ones, puts the onus on individuals to save more.”
Adam Millsap, a research fellow with the Mercatus Center at George Mason University, tells Bankrate that automatic enrollment in 401(k)s have grown in popularity, which boosts savings.
“Auto enrollment has been shown to increase the proportion of people who save,” Millsap says.