You may have felt this for a while, but a new study confirms it — making sure you're saving enough for retirement is your responsibility.
Companies have been cutting back on what they put toward employees' retirement, researchers from consulting firm Willis Towers Watson found. Employers contributed 9.1% of worker pay toward benefits like pensions, 401(k) plans and retiree health care in 2001. That figure dropped to 6.8% in 2015.
Another telling stat: 15 years ago, retirement benefits were the work perk that employers spent the most money on — now, it's health care, which eats up 63% of benefit spending.
That's not to say that employers aren't getting behind the 401(k) match — in fact, a separate recent study by Vanguard shows that companies actually boosted their estimated contributions in 2016 to an all-time high of 4.7% of employees' salaries. But 401(k) plans are typically cheaper for companies to administer than pensions, which are supposed to guarantee an income to workers after they retire. Plus, how effective they are as a savings vehicle really depends on whether the employee participates.
So what does that mean for you? In a nutshell: It's time to stop putting retirement on the back burner, because the onus for saving is shifting from employer to employee.
Here's what to do:
- Take advantage of Corporate America's burning desire to match your 401(k) contributions — big companies like Microsoft and Host Hotels & Resorts have been boosting their matches recently in an effort to retain employees and help them save more for retirement, the Wall Street Journal reports.
- Make sure you have a plan to steadily increase your retirement contributions over time. That might entail enrolling in an auto-escalation feature, if your company offers one, or making a promise to boost your retirement contributions by the same percentage as your next salary hike.
- See what low-effort steps you can take now to better build your nest egg — for example, choosing investments with low fees, or freeing up other areas of your budget that you can divert into retirement savings. There are a slew of small moves you can make that could have big impact when you're ready to retire in 10, 20 or 30 years.