Saving for retirement requires sacrifices. People have to watch their spending now in order to generate the savings that will sustain them in the future. It’s hardly a secret that collectively Americans are still not saving enough. As reported by Bloomberg, the typical Baby Boomer, whose generation as now begun to retire in large numbers, has a median of $147,000 in all of his or her retirement accounts according to the Transamerica Center for Retirement Studies.
Part of the reason for this aggregate lack of savings is that one in three private sector workers don’t even have a retirement plan through their employer. The good news is that recent data indicate that those who are fortunate enough to have a retirement plan through their employer have begun to set aside more for their later years.
According to the Plan Sponsor Council of America, workers in 2015 put nearly 7 percent of their salaries into 401k and profit sharing-plans. That’s up from roughly 6 percent in 2010. An increase in retirement savings of less than one percentage point might not sound like much, but as pointed out by writer Ben Steverman, that translates into a 10 percent increase in the amount flowing into these plans over five years, which in turn translates into billions of dollars.
According to the Investment Company Institute, approximately $7 trillion is already invested in 401k and other defined contribution plans. It’s still not enough, but at least savings are on the rise.