Almost a quarter of retirement savers contributed 10% of their income, one new study found
Inflation and fears of the economy didn’t stop some retirement savers from contributing to their plans, a new Vanguard report found.
One major driver of these continued contributions: employer perks such as automatic enrollment, Vanguard said. More than half of plans have auto-enrollment, which automatically places workers into the workplace retirement plan. That figure is even higher among plans with at least 1,000 participants, the firm found.
Financial advisers typically suggest saving somewhere between 10% and 15% of earnings, and these automatic features generally stayed in line with that. Four in 10 plans with automatic enrollment and increased deferral rates had a cap at 10%, and another one in three had a cap between 11% and 25%. There were 6% of plans that said they had no cap, but Vanguard’s report said it was “likely an error.”
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