Preparing for retirement requires decades of saving and planning, yet the majority of American workers say they are already falling behind in building a nest egg for their golden years.
About 56% of surveyed workers feel they are lagging in saving for retirement, with 37% of that group describing themselves as “significantly behind,” according to a new poll from YouGov for Bankrate.
Those closest to retirement age were the most likely to say they aren’t prepared financially to step back from work, with 6 in 10 baby boomers and almost 7 in 10 Gen Xers feeling this way. But even younger generations feel they’re not keeping up, with 49% of millennials and 42% of Gen Zers, who are 18 to 26, expressing the same concern.
Meanwhile, Americans believe they need an average of $1.8 million to retire comfortably — about $100,000 more than they pegged as the ideal nest egg last year, according to an August survey from Charles Schwab. A year of searing inflation, which has eaten into workers’ savings, have pushed the bar higher for the amount people believe they’ll need in retirement, according to experts.Â
“Amid the tumultuous developments of the past several years, including a short but severe recession and a period of high and sustained inflation, a majority of Americans say they are not where they need to be to achieve their retirement savings goals,” Bankrate Senior Economic Analyst Mark Hamrick said in a statement. “Compared to our survey about a year ago, there has been no progress on this front.”
1 in 5 aren’t saving
Nearly half of the survey’s respondents who said they had an idea of how much money they would need to retire said they didn’t believe they would be able to reach that amount, the Bankrate survey found.Â
Even though older workers were most likely to say they are lagging in retirement readiness, about 1 in 4 baby boomers and 1 in 5 Gen Xers said they aren’t socking away any money in their retirement accounts this year and hadn’t saved anything in 2022 either, according to the poll.Â
Yet despite the impact of inflation and other headwinds, some workers are upping their retirement contributions this year. About one-quarter of workers said they’re stashing more money in their retirement accounts in 2023 versus last year, the survey found.Â
The poll includes responses from 2,527 U.S. adults, including 1,301 people who are working full-time, part time, or temporarily unemployed. The responses, which participants submitted online, were collected between August 23-25, 2023
Social Security worries
At the same time, workers are feeling more pressure to stash more money for their retirements amid an uncertain future for Social Security, the pension plan for older and disabled Americans. According to the Social Security Trustees report, Social Security’s trust fund reserves could run out in 2033, which would result in an across-the-board benefits cut of about 25%.
Due to those projections, 72% of Americans report not factoring in Social Security benefits into their retirement income plans, while 79% say they feel similarly uneasy about the future of Medicare, a new study from insurer Allianz Life shows.
