529 Plans, HSAs Gaining Ground: Ascensus

Ascensus' 401(k) platform data, meanwhile, showed Americans under 25 years old are saving at lower rates than those in older age groups, which "suggests the need for further investigation into the impact of competing financial priorities, including student loan debt," according to the company.

But there was a "notable, positive difference in progress for savers" 25 to 34 years old: Of all retirement savers on the Ascensus platform who said they're "on track" to meet their goals, 20% of them are in that age range, compared with only 3% for those under 25, the company pointed out.

"We've seen a shift in the way that individuals across different life stages are saving for themselves and their families," according to David Musto, Ascensus president. "To continue to address the savings deficit millions are facing, our industry needs to focus on offering tools and resources that make it quick, simple, and automatic for savers to track their progress," he said in a statement, adding: "Employers, state governments, and financial advisors will continue to play an integral role in encouraging individuals to make the most of the savings vehicles and tools available to them."

The company analyzed data across a population of more than 88,000 retirement plans, 4.6 million 529 college savings accounts, over 280,000 consumer-directed health care accounts, and 20 Achieving a Better Life Experience (ABLE) plans for which it provided recordkeeping and administrative services as of Dec. 31, it said.

One takeaway from the research was that there's still "no one-size-fits-all approach to planning for what matters most," Ascensus said.

Among the other findings of the research was that plan sponsors and savers see value in automatic savings models: 401(k) plans designed with automatic enrollment and automatic escalation features saw an average plan-weighted participation rate of 81%, 10 percentage points higher than that in plans without automatic enrollment, the company said. In 2018, 35% of 529 account owners had scheduled recurring bank contributions and 20% of ABLE accounts leveraged automatic savings methods. About 6% of 529 account owners use a payroll direct deposit, but there is "more opportunity for employers to offer and promote 529 account payroll integration to help employees seamlessly make regular contributions," it said.

Meanwhile, digital tools are having a positive influence, it said, noting its Retirement Outlook Tool enables savers to refine retirement savings goals, illustrating how their current savings levels may affect future readiness. In 2018, 26% of first-time tool users were saving at an average rate of 8% within only a few weeks of engaging with it, the company said. That "suggests that access to the right planning tools can make a positive difference in getting employees closer to a savings rate of 9% or more, the minimum rate that 'financially prepared' savers have selected," it said.