As one grows older, one also grows wiser. Perhaps that explains the findings of a recent survey, which found that workers contribute more to their retirement accounts–both in terms of dollar amount and percentage of salary–as they get older. From Pension Benefits:
Our study revealed that 60.2% of employees were saving for retirement at an average salary deferral rate of 6.7%.
As employees aged and drew closer to retirement age, a higher proportion of them elected to make contributions to their retirement plan, with participation increasing from 48.4% for employees aged 20 to 29 years to 64-4% for employees aged 61 to 69 years (Exhibit 1). Salary deferral rates similarly increased with age, with employees aged 20 to 29 years deferring on average 4-9% of salary and employees aged 61 to 69 years deferring on average 9.2% of salary. The pattern of older workers saving more than younger workers was true for both genders.
Predictably, a worker’s income bracket plays a large role in how much he/she decides to save. From Pension Benefits:
Overall, more of those in higher compensation groups were saving, and they saved at higher rates. Among those earning $20,000 to $29,999, 36.8% of employees were saving, and they saved on average 4-7%. Among those earning $110,000 to $199,999, those percentages rose to 81.8% and 7.9%, respectively.
When considering compensation groups individually, the research showed that more females were saving for retirement than males and they saved at a higher rate than males in most compensation categories.
The full survey results can be found here (registration required).
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