Financial Finesse attributed the change in deferral rate to the rise in automatic enrollment in 401(k)s.

The survey found that Millennials, women and households making less than $60,000 a year are more likely to not be on track for retirement. Only 17 percent of Millennials and 17 percent of women said they were on track to reach their income-replacement goal in retirement, down from 19 percent and 13 percent, respectively, in 2011.

As Millennials enter the workforce, more of them are being automatically enrolled in their employer-sponsored retirement plan, but according to a 2011 Mercer study, participants who are automatically enrolled defer between 3.5 and 4.4 percent into their plan vs. more than 7 percent for those who proactively elect to contribute.

Only 10 percent of employees earning less than $60,000 a year reported being on track, down from 11 percent the year before. Participation rates in this group also fell, dropping to 84 percent from 86 percent last year. The percentage of lower-income households that know they are not on track fell from 26 percent last year to 23 percent this year, the study found.

Investor confidence has increased along with investor behaviors in response to recent market gains.

"This is good news for retirement preparedness as investors are more likely to remain invested during market corrections, thus improving their chances of realizing long-term performance in line with historical averages generally used in retirement projections," the report found.

Most employees are not sure how to estimate how much money they will need to live comfortably in retirement. Seventy-six percent of employees that said they are not on track to reach their goals, have not run a retirement projection to determine how much they need to save and how they should invest their savings.

According to the Employee Benefit Research Institute, 45 percent of workers guess at how much they need to accumulate rather than doing an actual calculation.