Here's why Americans are contributing more to their 401(k) plans.
But a tight labor market has also helped fuel greater 401 contributions from employers out of a need to be more competitive, Greenan said. The current unemployment rate of 3.5% is at its lowest level in roughly five decades.More companies have been automatically enrolling workers into workplace retirement plans over the past decade.
Most plans historically enrolled workers at 3% of pay — which retirement experts almost unanimously agree is generally far too low to save an adequate amount of money for retirement. More than three-quarters of 401 plans using auto-enrollment are also automatically increasing participants' savings rate over time, a process known as auto-escalation.
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