Too many people are still not saving enough for a comfortable and financially secure retirement. At least that is what a new study from the Consumer Federation of America (CFA) suggests because only 38 percent of U.S. adults were found to currently be making “good” or “excellent” progress toward meeting their long-term savings needs. In fact, more than a quarter (27 percent) of surveyed Americans indicated that they are not making any progress toward their retirement goals, not surprising since less than half (48 percent) of respondents reported that they are able to regularly set aside at least 5 percent of their income.
A lack of consistent savings also means that meeting short-term financial obligations could be a challenge for many Americans. That is evidenced by the fact that only 65 percent of surveyed adults said that they are confident they have sufficient emergency funds to cover unexpected expenses like car repairs or doctor visits. Similarly, a new report from Bankrate found that barely even half (52 percent) of surveyed consumers currently have more emergency savings than what they owe in credit card debt. At the same time, 17 percent of respondents reported having no credit card debt but no savings either. That agrees with a study we looked at last week from Bank of America Merrill Lynch (BofAML), which asked U.S. adults to list their biggest barriers to retirement saving and found that one of most frequent responses was “I prioritize(d) paying down debt.”
Shifting the focus back to the Bankrate report, surveyed Millennials as expected were the most likely to say that they have more credit card debt than savings. However, more than one in five Baby Boomer respondents also said that they owe more on their credit cards than they have in savings, an alarming figure given this age cohort’s proximity to retirement. Even worse is that 28 percent of respondents from the Silent Generation, Americans ages 72 and older, reported that they have no emergency savings, the highest percentage of any age group. Greg McBride, chief financial analyst at Bankrate, added that “This is a testament to how many seniors are surviving on a fixed income such as Social Security and a pension with little wiggle room.”
Sources: CFA, Bankrate, BofAMLPost author: Charles Couch