Youthful ignorance can be the most costly, since the missing money would have had decades to compound. For example, every $1,000 not contributed to a retirement plan in one's 40s means about $2,700 less in a retirement fund 20 years later, assuming 5 percent real returns annually. The same $1,000 contributed in one's 30s might have grown to nearly $4,500. In one's 20s, failure to contribute $1,000 could mean $7,300 less in retirement money.
Employers could shrink the amount of money left on the table by automatically enrolling workers in retirement plans at a default rate that captures the full company match - considered a "best practice" in the employee benefit field, Stein said. Alternatively, the default rate could be lower but automatically escalate over time.
Automatic enrollment has significantly increased employee participation in retirement plans, but many save less than they would have had they chosen a contribution rate on their own, according to studies by the Center for Retirement Research at Boston College and Vanguard Group, the financial firm.
Vanguard's study of 2 million retirement plan participants found the average savings rate was 6.6 percent for those with automatic enrollment but 7.5 percent for those with voluntarily enrollment. The average default rate for automatic enrollment was 3.4 percent in the Boston College study, while the average needed to get the full company match was 5.1 percent.
Not surprisingly, Financial Engines also recommends providing advice to employees as a way to reduce unclaimed matches. The retirement advisor found that only 15 percent of employees who received advice failed to get the full company match, compared with 26 percent who received no advice.