While most Americans are still far from being on track when it comes to saving for retirement, there are signs that they’re taking steps in the right direction.
Eight in 10 workers either opened a new workplace retirement account last year or increased the amount of money they contributed to an existing one, according to the latest Plan Wellness Scorecard from Bank of America Merrill Lynch.
The report found that total contributions increased 14 percent in 2015, and the number of employees with balances increased 16 percent in the same period.
The report also revealed several trends in retirement benefit plans that have pushed workers to save more. Here are a few of the findings:
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1. Companies are enrolling everyone. While auto-enrollment used to affect only new hires, more companies are now putting all eligible employees into plans by default. Workers who choose not to participate must opt out.
2. They’re automatically escalating contributions. Among the companies that use auto-enrollment, 85 percent also automatically increase the amount that workers contribute every year.
3. They’re providing in-person guidance. More companies are offering live help to workers trying to understand and plan their retirement investments. Group seminar attendance increased 43 percent from 2014 to 2015, and the number of one-on-one meetings increased more than 150 percent.
4. They’re offering a Roth option. Roth 401(k) accounts allow investors to pay taxes upfront on their contributions but make tax-free withdrawals in retirement. That can be an appealing option for young workers, especially because unlike a Roth IRA, there are no income limits on Roth 401(k) contributions.
