Automatic enrollment, one of many retirement saving tactics expected to increase in frequency due to the passage of the SECURE 2.0 Act of 2022, are favored at an all-time high, new data from American Century shows.

Among retirement plan participants surveyed in late 2022, 71% agreed employers should auto-enroll workers at a 10% default, compared with 47% in 2021 and 46% in 2020, according to the American Century Investments 10th Annual Retirement Savers Survey: Reflection, Risk and Resolve.

While survey respondents in 2022 were not asked their opinion of lower deferral rates in 2022, in 2021, 68% agreed plan sponsors should auto-enroll participants at 6% default, and 70% agreed in 2020.

Most retirement plan participants consider themselves average savers, grading their retirement savings efforts at a 3.5 on average, or a C+ in 2022, compared to a 3.6 average or B- in 2021, according to the survey.

“Men, those with incomes of $100K or more, and those with assets of $500K or more are most likely to give themselves an A or B,” the report stated.

Roughly 80% of participants want some degree of employer encouragement to help them save for retirement, with more than four out of 10 expressing a preference for either a “kick in the pants or a “strong nudge,” data showed.

A kick in the pants from employers to save more is favored by 14%

A strong nudge from a plan sponsor is preferred by 32%

A slight nudge is best for 35%; and

Leave me alone is preferred by 19%

Baby Boomers (born 1946 through 1964) are more likely than Millennials (born 1980 through 1994) and Gen Xers (born 1965 through 1979) to want to be left alone, while 85% of Millennials want at least a slight nudge, the research found.

Employers may be able to provide greater support for employees to save more at a time when the American Century research found workers are feeling optimistic about retirement, expecting a better standard of living in retirement.

Responses to a question about respondents’ expected standard of living in retirement were more mixed, with a plurality (42%) expecting their standard of living to be much worse than it is now. The percentage of respondents expecting an increased standard of living, however, did grow to 33% in 2022 from 29% in 2021, the data showed.

“Half of Millennials expect it to be better, driving the increase,” the survey stated.

A press release with the survey called 2022 optimistic, with respondents’ outlook ranking fourth among the 10 surveys the company has conducted; only 2017, 2018 and 2021 ranked higher.

The optimism could be reflecting confidence in the features and products prevalently provided by plan sponsors to employees for retirement, like target-date funds, and greater prevalence of auto-enrollment to address the needs of plan participants, stated Glenn Dial, a senior retirement strategist at American Century Investments.

In a longer-term trend, participant interest in target-date funds increased to 72% in 2021 from 55% in 2013, the first year the survey was conducted.

American Century conducted the participant survey between December 7, 2022, and January 4, 2023. The survey included 1,509 full-time workers between 25 and 65 saving through their employer’s retirement plan.

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