Many Americans worry about having enough money saved for retirement — 59% of the 1,026 adults Gallup surveyed in April. They should be concerned.

Nearly one third of workers surveyed by the Federal Reserve last year said they had no retirement savings — 19% of which were ages 55-64. Nearly half of adults among the 4,100 surveyed had no retirement plan.

Those who are saving aren’t saving enough, says Holly Verdeyen, Russell Investments’ director of defined contribution investments. Employees need to save 10-15% of their salary, she says. “We know participants are saving nowhere near that.”

Most save 3-4% a year — a typical starting point when an employee is automatically enrolled in a retirement plan. However, employees aren’t increasing their savings annually and won’t have enough for retirement, says Alex Assaley, lead adviser at AFS 401(k) Retirement Services.

Enter automatic escalation. Assaley says more employers are using this tactic of slightly increasing contributions each year to help their workers save for the future. “They just aren’t doing it on their own,” he says of employees.

Verdeyen expects its popularity to increase. “We do think auto-escalation is going to be the next big trend, the next big push by plan sponsors,” she says. Auto enrollment has increased participation in retirement plans, Verdeyen says, but now the focus is on ensuring employees have enough money to retire.

“We’ve got to fix the savings problem,” she says. “If they can’t live without a little pay now, how are they going to live without a lot of pay later?”

Start saving early

Enrolling younger workers — those who are 25 years or more from retiring — is key, Assaley says. Verdeyen agrees, and suggests providing employees with retirement-savings projections early in their career. This not only helps keep workers on track, she says, but also aids in altering their attitude toward saving for retirement. Personalizing the conversation is also important, she adds.

Often, new employees are the only ones who can take advantage of automatic features, Verdeyen says, but employers should make that available for the entire workforce. “They shouldn’t just limit it to new hires,” she says. “Someone has to go back and implement these for existing employees.”

Ideally, Assaley says he would like to see an employee start at 6% and increasing 1-2% a year until they reach 12%.

Assaley, who mainly serves mid-market clients, says about 60% use auto enrollment, of which 75% use auto-escalation. Employers with opt-out plans have high participation, he says, and only about 10% of employees choose to opt out. “People know they need to save more, they just don’t know how to,” Assaley says.

The recession altered retirement plans for many workers — 40% of people age 45 and older surveyed by the Federal Reserve said they moved their retirement date back. Nearly a quarter of the 55-to-64-year-olds who hadn’t retired said they plan to “keep working as long as possible,” while 18% expect to work part time after retirement.

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