BOSTON, Oct. 28 (UPI) -- Most people say saving for retirement is their top financial priority, but most don't save enough and behavioral economics may explain why, a U.S. expert said.
A survey sponsored by the mutual fund company T. Rowe Price found about 72 percent of U.S. adults said saving for retirement was their top financial goal, while 42 percent said a contribution of at least 15 percent of their pay was "ideal."
However, the survey found 68 percent said they were saving 10 percent or less, which Stuart Ritter, a senior financial planner for T. Rowe Price, described as "not very much."
The average contribution was about 8 percent of pay, calculated Fidelity Investments, which tracks client contributions to the 401(K)s it manages.
The U.S. Internal Revenue Service recently increased the limit on contributions to 401(K) and 403(B) retirement plans from $17,000 to $17,500 and the so-called catch-up contribution available to people who are age 50 or older remained unchanged at $5,500.
Ritter said behavioral economics research has shown employers unfortunately send the message to their workers that about 3 percent is sufficient for the employee to put aside for retirement because that is how much the employer usually matches.
Ritter told Squared Away, a Financial Security Project at Boston College, in an interview the financial industry is partially to blame.
"We have done a really good job of conveying to people how important saving for retirement is, but what we haven't done as good a job of is telling them how much to save," Ritter said.
The Center for Retirement Research at Boston College found typical U.S. baby boomer households had $42,000 in their retirement plans at work in 2010.