How much have Americans saved for retirement? Not enough, according to a new study from GoBankingRates. Specifically, 56 percent of surveyed U.S. adults said that they currently have less than $10,000 set aside for retirement, and a third reported that they have no savings whatsoever. Roughly a quarter of respondents (26 percent) said that they have at least $100,000 saved for a retirement but this is still nowhere near what is needed to guarantee financial security in old age. Interestingly, the most common retirement savings balance reported by survey respondents after “less than $10K,” is “$300K or more.” The large gap suggests that simply getting started is possibly the biggest retirement savings hurdle for many Americans, and therefore provides another reason for plan sponsors to use automatic enrollment to help combat procrastination.
Elsewhere in the survey, women were found to be 27 percent more likely than male respondents to say that they currently have no funds set aside for retirement, and the gap between men’s and women’s reported savings widens as balances get higher. As for age-related differences, Millennials were unsurprisingly the least likely group to have substantial old-age savings. However, 72 percent of Gen Y respondents said that they have not even set aside $10,000 for retirement, and 42 percent reported that they have not begun saving at all. Such statistics are becoming increasingly difficult to accept with many Millennials now in their early 30s and therefore likely already having been a part of the workforce (earning an income) for several years. Older generations, though, were found to be falling even further behind when it comes to saving for retirement. For such individuals it is important that they utilize every tool at their disposable, such as the additional $6,000 each year in catch-up contributions that can be made to a tax-advantaged 401(k) plan for people age 50 and over. Consulting with a professional financial advisor can also help many Americans get back on track for achieving a comfortable retirement.
Post author: Charles Couch