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How to Get Americans to Save 10% for Retirement

The goal is ambitious, but a coordinated effort by financial pros, employers and individuals can make it a reality

By Stig Nybo

A challenging economy, longer life spans and a culture of consumerism have complicated Americans’ efforts to plan and save successfully for retirement.

When the National Foundation for Credit Counseling asked 2,205 people last year about their greatest financial regrets, the top three responses were habitual overspending, inadequate savings and not putting away enough money specifically for retirement.

The Goal: A Nation of Super Savers

This lack of preparedness isn’t just an individual problem; it impacts us all. And it’s time for us to to transform our culture from a nation of spenders to a nation of super savers.

As a country, we have successfully tackled big issues before. That’s why, as I say in my new book, Transform Tomorrow: Awakening the Super Saver in Pursuit of Retirement Readiness, and my website,, I believe we can leverage lessons learned from past public service campaigns to transform our approach to saving.

(MORE: When You Haven’t Saved Enough for Retirement)

Now is the time to come together in a national movement and engage in thoughtful conversations about retirement readiness. The goal: to provoke everyone to save more – at least 10 percent of their annual income over their lifetimes.

Take a Page from 'Keep America Beautiful'

Like the successful anti-littering campaign "Keep America Beautiful" in the 1950s and '60s, we must focus our efforts on two fronts: behaviors and beliefs.

"Keep America Beautiful" recast the way Americans viewed littering and established a national understanding that we needed to act vigilantly to protect the environment. As a result, litter has been reduced by 61 percent since 1969.

I believe our country would benefit from a similar national campaign aimed at changing the public’s mindset about saving for retirement.

The movement to improve our retirement preparedness must be all-inclusive, with participation from the financial services industry, employers and individuals.

What Financial Pros and Employers Can Do

For money pros this is a golden opportunity to become retirement plan advocates. Some already are, stressing the importance of saving for retirement to employers and employees.

But they need to push to help secure better outcomes for workers by pushing for more, and more effective, employer-sponsored retirement plans.

(MORE: The Retirement Gamble We’re All Making)


According to the U.S. Department of Labor, roughly 40 percent of employees don’t have access to workplace retirement plans. So if more employers simply offered 401(k)s and similar programs, they’d help workers save.

Employers with such plans should institute automatic enrollment, so employees will set aside a portion of their pay for the future unless they choose to opt out. The data shows that automatic enrollment goes a long way toward increasing participation in workplace retirement plans. Fewer than 5 percent of employees in auto enrollment plans opt out, according to the Plan Sponsor Council of America.

Increasing retirement plan coverage and employee participation rates would be great first steps. But employers can do more.

Improve Auto-Enrollment Retirement Plans

Many plans with automatic enrollment are built with a default savings rate of just 3 percent of an employee’s pay. But 3 percent is simply not enough to ensure workers will retire with confidence. A default rate of 10 percent of annual income would dramatically improve results.

To help employees reach that savings goal, employers should consider auto-enrolling workers at an initial savings rate of 6 percent then periodically raising that level automatically until it reaches an ultimate annual contribution rate of at least 10 percent. Employees could be allowed to opt out or decline the increase if they wish.

Employers can also encourage staffers to take advantage of user-friendly planning tools to help them decide how much they need to save and whether they’re on track to retire successfully.

What the Public Should Do

Individuals, whether in employer-sponsored plans or not, could push themselves to save more – ideally, 10 percent of their annual incomes – so retirement security becomes an essential part of their financial plans.

Those who are participating in 401(k)-type plans should become savvier about them. If you’re contributing to one now, do you know how much of your income is going into it? Do you know whether your employer matches your contributions, how big the match is and at what percentage of your income the match stops? You should.

By working together we can help ensure that every American is able to confidently prepare for and enjoy retirement.

Stig Nybo is president of pension sales and distribution for Transamerica Retirement Solutions, author of Transform Tomorrow: Awakening the Super Saver in Pursuit of Retirement Readiness and a retirement industry expert. Read More
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