Are you saving for retirement? If so, are you contributing more and more over the years or keeping what you add into your account the same? The top mistake most people make with their retirement contributions is to not steadily increase the amount they put in on a regular basis.

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“The biggest retirement mistakes most workers make is keeping contribution rates flat year after year,” stated Lisa A. Cummings, Esq., attorney and executive vice president at Cummings & Cummings Law. Cummings specializes in compensation and benefits, and she has seen the numbers for thousands of people’s plans.

She said a 2024 Federal Reserve survey shows that nearly half of households have less than $65,000 saved for retirement. She added, “For someone earning $70,000, staying at a 3% employee contribution means saving only $2,100 annually, an amount that will not come close to replacing income in retirement.”

Maximizing retirement contributions can potentially set up someone for financial success during retirement, according to Jared Hubbard, fintech product manager at Plynk, a no-fee investments app.

“As you put money aside, you can maximize your savings through retirement accounts such as IRAs and 401(k)s,” Hubbard noted, emphasizing that this is especially true if your employer matches contributions. “People 50 and over are also eligible for additional catch-up contributions to IRAs.”

Cummings said, “Employer matching contributions make this decision even more compelling. If the employer match is 50% on the first 6% of pay, failing to reach that level is the same as turning down free money.”

If an employee is not already at the maximum employer match level, they will never be able to recover the matched funds.

Matching contributions are a target meant to encourage further contributions from your own funds. Cummings added, “Once the employee passes the maximum employer match, even small increases in their contribution amount continues to compound powerfully.”

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Hubbard pointed out that one consideration retirees may not make is reevaluating their risk appetite in their investments.

“As you work toward your retirement goals, a balanced portfolio might be a strategy to consider,” Hubbard said. “Consider investing in assets that can provide a steady stream of income. This may include dividend-paying stocks, money market funds or bonds. When in doubt, do your research!”