Don't settle for 3 percent. More employers are slowly leaning into boosting their default savings rates. T. Rowe Price reports that one-third of plans set their employees' default contribution rate at 6 percent. But that still leaves the majority implicitly condoning a lower savings rate.
"The lower default is a lose, lose," says Blanchett. "The people who stick with it aren't saving enough and the people who reject it still use 3 percent as an anchor and might increase their rate slightly from there."
Ward says new workers should aim to start at no less than 6 percent with a goal of getting to 15 percent, including the company match, ASAP.
More from Personal Finance:
Switching jobs? Don't forget that old 401(k) balance
Why high 401(k) plan fees are here to stay
Like hefty tax bills? Stick with your old 401(k) plan
Say yes to automatic increases. Many 401(k) plans now offer the ability to have your contribution rate raised annually, typically by one percentage point. This auto-escalation feature is a textbook nudge to get us to save more. But most plans require workers to proactively sign up for it, rather than automatically turning it on and allowing workers to opt-out if they want.
If your plan offers automatic escalation, tick the box. Or create your own annual escalation schedule: At your annual work anniversary, birthday, or during annual open enrollment, boost your contribution rate by at least 1 percent.
Avoid the job-hopping backslide. When you land a new job, take a few minutes at orientation to figure out how to over-ride the low contribution rate you're likely to be automatically assigned.
"At a minimum you always want to contribute enough to get the maximum company match," says Ward. "And never reduce your savings rate. You want to maintain the savings rate you had at your old job. If your new job was a step up in salary, your goal should be to increase your savings rate."