What Can Occasional Increases Do for Retirement Savings?

Fidelity studied the benefit of increasing savings by 1% every five years.

During America Saves Week, an annual campaign, Fidelity urges people to start saving as early as possible, and if they can, increase savings each year during the campaign, even if only by a small amount.

Fidelity recommends participants save 15% toward retirement, including their pre-tax deferrals and any contributions their employers make.

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Last year, Fidelity examined the benefit of increasing 401(k) or 403(b) savings by just 1% for people ages 25 to 55. Each age saw additional estimated monthly retirement income, especially the 25-year-old. This year Fidelity took the analysis a step further, studying three increase scenarios to demonstrate the power of establishing ongoing savings rituals when young.

First, a 25-year-old earning $40,000 who increases his deferral this year by 1% could receive additional income in retirement of $190 per month.

Fidelity recognizes that Millennials will have a lot of expenses during their working lives, such as saving for a home, paying off student debt or unexpected health care costs. With this in mind, Fidelity studied the benefit of increasing savings by 1% every five years for a total increase of 5% over 25 years. Those who adopt this pattern could receive $690 more in monthly retirement income.

The impact is even greater if a 25-year-old begins a savings ritual where they increase their deferral by 1% annually for a total of 12 increases. Under this scenario, he could receive $1,930 per month in extra retirement income.

NEXT: Lessons for plan sponsors and participants

“Saving 1% at a point in time, and bumping up savings by 1% every year is good,” Katie Taylor, director of Thought Leadership at Fidelity in Boston, tells PLANSPONSOR. “But what about those in the middle with competing financial priorities?”

Taylor says employees understand the need to increase savings every year, but feel like they can’t. Fidelity’s scenario shows the benefit of increasing savings every so often.

“We had a really successful campaign last year. Some folks are intimidated and feel can’t save any more, but seeing what 1% can do encourages them,” Taylor adds.

She noted that plan sponsors are challenged a little bit with how to engage participants to save more, particularly with Millennials for whom retirement is so far away. “Using America Saves Week and tools and resources available will help plan sponsors with a strategy to help individuals save more,” she says.

However, encouragement doesn’t just have to come during America Saves week; plan sponsors can promote more savings when employees get a raise, at the beginning of the year and at the end of the year, according to Taylor.

She adds that overall financial wellness tools and education can help employees with budgeting, debt and college savings. “And, plan sponsors can use automatic enrollment, automatic deferral escalation and campaigns such as America Saves Week to encourage employees to save and save more.”

NEXT: Resources Fidelity offers

Fidelity offers many resources for retirement plan participants.

  • Join the conversation tomorrow during Fidelity’s Twitter Chat on Tuesday, February 23 from 2:00-3:00 p.m. ET by following #AutoSave16, @Jeanne_Fidelity, @SweeneyFidelity or @Fidelity;
  • Register for the Empowering Conversations Webcast on March 8 to help women learn to prepare for the unexpected;
  • Learn your Retirement Score, an estimate of your ability to cover expenses in retirement;
  • Have a child working? Give them a jumpstart on retirement saving and help them learn the power of compounding by opening a Roth IRA for Kids; and
  • Visit Fidelity Viewpoints for education about college savings, paying off debt, Social Security, health care and how one percent more can make a big difference.

Fidelity also offers a savings and spending checkup.

SURVEY SAYS: Annoying Co-Worker Actions

Most of us spend more time with our co-workers than with family or friends.

We can’t all get along all the time, so last week, I asked NewsDash readers, “What co-worker actions annoy you?”

I apologize that I forgot to toggle the first question to allow multiple answers; this probably explains why most responses were “other” (34.8%) or “all of the above” (28.8%). However, among those who selected just one annoying behavior—and I assume these are the MOST annoying to them—“kissing up to the boss” and “doing poor work or not as much work as others” topped the list with 6.1% of votes each.

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“Being late, for work or to meetings/calls,” “talking over others in meetings,” “drinking the last of the coffee and not making more,” and “wasting time on the internet/phone calls/social media, etc.” each were selected by 4.5% of readers. Three percent of readers are most annoyed by co-workers using a speakerphone and talking too loudly, 1.5% were most annoyed by cursing, and another 1.5% were most annoyed by co-workers attending to hygiene in the office, for example, clipping their nails.

Asked if they confront their co-workers about annoying behavior, 10.6% of responding readers said yes, 39.4% said no, and 50% reported they sometimes do.

“Other” responses included:

  • starting a conversation with me as I'm trying to leave work
  • In addition to several above, gum-popping, loud radios, crunching ice -- pretty much any annoying sound!
  • Inability to make a decision.
  • Says one thing, but does another
  • Passive aggressiveness
  • cracking of knuckles and spraying perfume
  • I don't care if you want to use your speakerphone, but for crying out loud close your office door! Why do you think you have to speak even louder?
  • All of the above, plus team members with negative attitudes. You're at work voluntarily, so try to be positive about it!
  • Being continually rude to other employees because of some perceived slight that may have occurred years ago.
  • Laughing too loudly, talking too loudly in a cubicle environment; not being as smart as me.
  • Always late with work
  • Co-workers that spend more time worrying about what others "are doing or not doing" than they spend doing their own tasks!
  • Talking too loudly and loud and/or annoying cell phone ringtones
  • those who believe they are entitled to a job
  • Don't complain that you're too busy then chat with a coworker for 2 hours!
  • I am totally annoyed when coworkers with children "work" from home instead of arranging for child care when school is cancelled. If a child is too young to be left alone at home while you work, then they have an obligation to pay for child care. Anyone that has children knows that you cannot fully contribute for 8 hours while watching your children. It is also frustrating to hear coworkers do the dishes etc....
  • those who screw up and throw others under the bus for it
  • talking with food in your mouth, talking too much, telling me how much you spent on your new outfit
  • In addition to all of the above - reserving all the "good" days for vacation so no one else can have them. There are only two of us, so I haven't seen an extended holiday weekend in years.
  • Leaving very early for lunch and very early at the end of the day. Management is not the strongest and won't address the issues.
  • speaking a language other than English with co-workers regarding work issues
  • coming to a meeting with their laptop and working on other things during the meeting
  • Being too concerned about what others have that they don't.

Readers who left comments shared specific stories about annoying co-workers and listed even more annoying behaviors. Quite a few suggested that there’s no use in getting annoyed and workers should practice tolerance, with one suggesting talking about annoying behaviors instead of stewing about them. And, there were some that pointed out we can all be annoying sometimes: “Of course I'm never annoying, except when I am annoying.” Editor’s Choice goes to the reader who said: “I just don't understand why everyone can't be as perfect as me.”

A big thank you to all who participated in the survey!

Verbatim 

I've learned to ignore most of the annoying noises and other distractions that come with working in cubes. However, people that talk loudly on the phone are beyond irritating. I shouldn't have to shout above them in order to conduct my own business. Apparently no one taught them about "indoor" and "outdoor" voices. Maybe I should have my granddaughter explain it to them.

I've come to dread the nail clippers!

It annoys me how people go on about something and turn around and do that exact thing or something similar to it.

If you have a problem, talk about it. Don't just sit and stew and try to figure out a way to make the other person's life more miserable. They may not even realize they are performing the annoying behavior.

Most days, I can roll with it. On those days when it gets too much? Why, Ma'am, there's a reason I took up boxing...

When staff use their speakerphone and talk even louder, I pointedly leave my office and shut their office door. It disrupts those in cubicles outside their office trying to do work and talk on the phone. Although they have the grace to apologize, their memories are oftentimes short.

Another one that I really dislike is leaving their ringer on for their cell phone so we all know when they get a personal call. Even worse is when they leave their phone at their desk so we can all hear the phone ring multiple times while they are somewhere else.

If it's just annoying that's one thing, but in a team setting annoying coworkers can completely ruin the team dynamics and productivity.

Need to be able to select more than one answer! Another one would be talking to family members every single day.

Just like family, we all get along pretty good, but do annoy each other, sometimes on purpose.

I'm self-aware enough to realize that I probably annoy the heck out of my colleagues at times, so I try to not be too critical of others. We all have flaws.

I have one coworker who always likes to tell me what I should have done instead of what I did. I have to bite my tongue not to lash out.

There is an advantage to having an office door, which in my case stays closed most of the time.

Worst co-worker ever was Mrs. Madelyn. She was an unkempt older lady that looked and behaved strikingly similar to the way actress (Anne Ramsey) played Danny DeVito’s momma in the movie “Throw Momma from the Train”. She sat in the adjacent cube. Her attitude, work ethic, and unpleasant disposition, although impressive, did not earn her the worst co-worker ever distinction. The woman must have had a terrible sinus condition or grew up in a barn. Multiple times each day she felt the need to snort phlegm into the back of her throat and then spit it into her trash can! To this day, she is the only woman that I have witnessed doing this disgusting feat. The sound alone made me queasy. Years later, when my wife was pregnant with our first child, she recommended the name Madelyn. Although it’s a beautiful name, I had to quickly veto it as that terrible co-worker permanently ruined the name for me! Twenty years later, I still can’t clear it from my memory!

Verbatim (cont.) 

The grass isn't always greener - there are bad apples in every tree!

No point in complaining about it as there will always be someone taking advantage.....

If I see someone filling their cup of coffee without making a new pot, I give them a lesson right there and then about making coffee. They are then awarded a certificate of completion. There are now 5 people who have the certificates, yet there is still a problem....

Without the workplace, who would we complain to about annoying behaviors?

tolerate them so there will not be any tension among team mates

Recently, the main office moved to a new space and most staff went from having a private office to an open cubicle environment. In an open environment, coworkers who talk loudly or talk across the room to one another is my biggest pet peeve. And the fact that my cubicle is closest to the coffee bar and am constantly asked questions about it as if I am the barista...NOT!!!

Of course I'm never annoying, except when I am annoying.

Someone with a good work ethic will control or simply not do the list of "bad habits" you presented. But, that seems to be a dying trait. Sometimes I just want to say "be an adult and do your job."

Add another annoyance - someone standing in my doorway droning on about something I don't give 2 hoots about!

Arrives late, leaves early, lots of call offs. Oh, this person thinks they put in a full week. Granted, I arrive early, leave late and the last time I called off was over 1-1/2 years ago for an accident. This person seams to get away with it for years. It is just not right.

Not everyone is attached to their cell phones with an umbilical cord.

I just don't understand why everyone can't be as perfect as me.

I plan ahead to meet my deadlines. It annoys me when co-workers lack of planning creates an emergency to meet my deadlines.

I sit behind someone who literally sighs and yawns like a little kid all day long.

It's like junior high all over again...who can be the 'teacher's pet'. I survived junior high once and sure don't enjoy going through it again.

 

NOTE: Responses reflect the opinions of individual readers and not necessarily the stance of Asset International or its affiliates.

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