People Are Saving More in their 401(k)s — Without Even Lifting A Finger

People Are Saving More in their 401(k)s — Without Even Lifting A Finger

Here's an interesting twist on the topic of retirement: Robots could be the secret to saving more.

Say what, now?

To be clear, we're not talking about clunky humanoid machines that are threatening to take our jobs. We're referring to automation, which appears to be fueling an increase in people saving for retirement, according to new data from Fidelity Investments.

The retirement plan provider reported that their customers' average 401(k) balance hit a record $95,500 in the first quarter of 2017, thanks to both strong stock-market performance and increased contributions from employees and employers — a record 27% of workers increased their contribution percentages in the past year.

But an analysis of the data attributes much of that savings boost to auto-escalation, a feature that some employers, particularly big companies, offer in their retirement savings plans. It essentially involves nudging up an employee's contribution percentage periodically, like every six months or every year, until you hit a cap.

RELATED: Quick Tips to Help You Kick-Start your Retirement Savings

"Auto-escalation isn't all that widespread, yet is driving 50% of the savings increases" among the subset upping their contributions, said Jeanne Thompson, a senior vice president at Fidelity, to Bloomberg. "It emphasizes how important auto-enrollment and auto-escalation have been to the retirement system."

Not to be outdone, IRA savers are also doing well: 17% more Fidelity customers contributed to accounts this quarter compared to the same time last year, and 38% increased the dollar amount they're contributing, too.

And you can stop thinking that millennials are too busy Snapchatting to plan for their futures — 42% more people in this generation contributed to an IRA this year compared to last, and half are upping their contribution dollars.

So if you're part of the group saving more for retirement (whether you know it or not), congrats! We can practically hear the bliss of life-after-work calling.

RELATED: 7 Common Mistakes Financial Planners See When It Comes to Retirement


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