NEW YORK (MainStreet) — One-third of Americans have never increased the percentage of their salary that they contribute to a company 401(k) plan, shortchanging themselves on additional retirement savings.

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A survey from TIAA-CREF, the New York-based financial services company, reveals that 36% of Americans who contribute to an employer-sponsored retirement plan have maintained the same amount they are contributing. Only 18% increased their contribution in the past year, and 11% did so in the past two years. Since 44% of employees already only save 10% or less of their annual income each year, many Americans are missing out on ways to save for retirement and boost their income.

Many employees sign up for their 401(k) and allocate only 4% of their salary and fail to increase the amount in the future, said Dan Keady, senior director of financial planning at TIAA-CREF.

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“This holds people back and over time they need to push that amount up,” he said. “If they make a small change now, it can have a big impact down the road. It does not seem real to them.”

Even increasing your contribution by a mere 1% will increase your savings substantially. An employee who saves 5% on a $50,000 salary and receives an 8% annual rate of return will result in retirement savings of $310,500. If you increase the savings to 6% monthly you will receive $372,600 or a difference of $62,500, said Robert R. Johnson, professor of finance at the Heider College of Business at Creighton University.

“Unfortunately, too many Americans follow the adage out of sight, out of mind,” he said. “It is uncomfortable for many to think about retirement, so they cope by simply not addressing the issue. Increasing your retirement plan contribution is relatively easy to do when you get a raise, as you aren’t accustomed to spending off of your higher income level. ”

Millennials, or those who are 18 to 34 years old, were more likely than any other age group in the survey to increase savings after a raise, with 52% who did so. In the group of Millennials who did not increase savings after a raise, 23% said they did not do so because they were already contributing the maximum amount allowed.

“It seems that this younger demographic is getting the message that saving for retirement is extremely important and that there is no better time to address this issue than now,” said Johnson.

Some employees use the calculators on financial websites to determine how much they will gain in retirement savings by simply adding 1% to 2% of their existing contribution, Keady said.

“People are being more cognizant,” he said. “The calculators make it real for them. The interactive tools can really motivate people to incrementally increase their percentage.”

The survey also found 57% of workers did not increase their plan contribution after their last raise. The most common reason cited for not increasing contributions after a raise was because they had other expenses to pay for immediately, while 25% of respondents did not increase their contributions after their last raise because they were already contributing the maximum amount to their retirement plan.

The best strategy is for employees to increase their savings rate over time so they can save 15% of their salary instead of only 10%, Keady recommends.

“Even adding some increases over time will have a huge impact,” he said. “If you keep moving that percentage forward, over time it can really build up.”

The survey found that 53% of employees were not automatically enrolled in their company’s plans. Those not automatically enrolled lost precious time saving for retirement with 37% who said they waited six months or longer to enroll and even worse, 24% who waited a year or more.

“People tend to procrastinate, so auto enrollment is important to have,” Keady said. “You can also automatically escalate your contribution. Depending on your plan, it can remind you to save more money.”

Saving money in a retirement account is the only way “to beat inflation,” said Michael Solari, principal of Solari Financial Planning in Bedford, N.H.

“The only investment option that outpaces inflation is equities,” he said. “It can grow beyond the rate of inflation and create a nest egg. There is no other investment that is sure to garner that type of return.”

While retirement is hard for a Millennial to comprehend, increasing your 401(k) allocation each time you receive a raise will make a difference, he said.

“Time is the number one thing people need to be aware of,” Solari said. “When you are young, you have so much time to grow that money.”

While wages for many employees have remained stagnant, they can reduce their daily expenditures or change their health or life insurance plan and allocate the money that was spent on premiums into their retirement plan, said Patrick Morris, CEO of New York-based Hagin Investment Management.

“A little bit of impulse control goes a long way and you can easily save $6,000 a year since real wages have not been going up,” he said.

Other investors could be increasing their IRA contributions instead of focusing on their 401(k). Fidelity Investments said contributions of IRAs reached an all-time high with average contributions for 2013 increasing to $4,150, a 5.7% increase from 2012.

“What we've witnessed recently at Covestor...is people rolling over 401(k)s and consolidating IRAs into our no-management fee core portfolios,” said Kalen Holliday, director of communications for Covestor, based in Boston and London. “These low-cost passive investment options appeal to people saving for retirement.”

--Written by Ellen Chang for MainStreet

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