ST. LOUIS–A new survey reveals just how financially unprepared many Americans are for retirement, with one in 10 saying they believe they will never be able to retire.
Financial planners, including within credit unions, often say workers need 80% of their pre-retirement income each year to cover expenses when they stop working.
But the median amount Americans have saved for retirement is just $71,500, according to the new survey conducted by Anytime Estimate, a unit of Clever Real Estate. The survey of 1,000 Americans found 27% have less than $50,000 in retirement savings, and 16% have nothing saved.
“We found that Baby Boomers on the cusp of retirement have less than half the recommended savings, with little time to make up the deficit,” Anytime Estimate said in releasing its findings. “Across all age groups, financial stress from the pandemic caused many Americans to stop saving for retirement entirely or spend retirement funds that would have accrued interest for years to come.”
The Findings
Among the findings in the survey:
- 63%) of non-retired individuals are currently saving for retirement — down from 93% before the pandemic.
- Although fewer adults are saving for retirement, those who are investing are setting aside more. In 2022, 68% of Americans are following experts' advice to save 15% or more of their annual income for retirement, compared to 61% prior to March 2020, the company said.
- 62% of Americans raided their retirement savings to pay for expenses during the pandemic, so they may hope to replenish their accounts through higher contributions.
- 37% of Americans are not saving for retirement. Of those, 39% reported $0 in retirement accounts, likely meaning some of them have never saved, or they spent everything they had saved.
- 83% of adults who aren't currently saving for retirement were saving before March 2020. “Surprisingly, boomers boast the second-largest share of members who aren't saving for retirement (38%) — behind Gen Z (44%) — even though their generation is most likely to retire soon,” Anytime estimate reported.
- 52% of Americans who are currently saving for retirement began doing so before their 30s. Boomers, however, started saving later in life, with 23% waiting until they were 50 years of age or older. Baby boomers making the median annual income should have $286,400 in retirement savings, but the median amount saved is only $112,000 — 39% of the recommended amount, the company said.
- 29% of Millennials who are currently saving for retirement began doing so between 25 to 29 years old. That's double the percentage (14%) of boomers who started saving at that age. Eighteen percent of Millennials started saving even earlier, between 20 to 24 years old, compared to just 9% of Boomers.
Pragmatic Views
According to Anytime Estimate, many workers view their retirement prospects more pragmatically. Thirty eight percent — including 42% of boomers — think they'll retire in their 60s near the average retirement age.
Approximately 10% of Americans don't think they'll ever be able to retire, the survey found.
Among those respondents, women are 71% more likely than men to say so.
Nearly two-thirds (62%) of Americans with retirement savings spent some of it to make ends meet during the pandemic, with 16% spending $15,000 or more from retirement accounts.
“As a result of depleted reserves, 79% of adults are worried they'll have to lower their standard of living in retirement,” Anytime Estimate reported.
More than half (56%) of Americans believe they'll outlive their retirement savings, the survey found.
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