[For the official May index results, plus data, click here]
A sluggish economic recovery may have many Americans wondering if they’re saving enough for retirement. However, this month’s COUNTRY Financial Security Index survey sheds light on a more concerning factor. One in four Americans, across all age groups, admit they are not saving at all for retirement, or they are unsure.
Americans ages 18 to 29, are the biggest offenders. Thirty-two percent in that age bracket are not saving at all for retirement. Perhaps they’re buried in college loans, or feel like retirement is too far away to worry about.
Can we learn from past mistakes?
Flash forward to people 40 years and older, and you’ll find nearly 40 percent say they regret decisions they’ve made with their retirement savings. What’s the biggest reason they point out? Nearly half say they regret not starting to save early enough. Hopefully this is an eye-opener for today’s 18-to-29 year-olds, college loans or not, to save early and to save often.
Are people giving up?
Let’s circle back to the 25 percent of Americans who aren’t saving at all. Nearly half (46 percent) say it’s not possible for a typical middle-income family to save for a secure retirement. This is two points higher than this time last year and the most to say this since March 2011.
Is it possible they aren’t saving because they don’t think it’s possible to have a secure retirement? That we don’t know. But, what we do know is making retirement a priority is an important step in achieving long-term financial security and avoiding what appears to be the coming retirement crisis.
Financial knowledge gap?
Americans may be wary of their retirement forecasts not only because many are not saving, but also of those who are, they are not taking the proper steps to set themselves up for success in their golden years.
- A majority (55 percent) say they are not or do not know if they participate in a 401k.
- Twenty-nine percent say a 401k is the primary way they are saving, however, most lack a diversified retirement portfolio as just 17 percent say they are using at least two different savings vehicles.
- Of the 45 percent who do have a 401k, nearly one-third (30 percent) do not know where their contributions are invested.
On the Bright Side
Those who are saving, are on top of things. Forty-three percent of Americans say they check the health of their retirement savings every few months. Which is great! It’s important to make sure you’re doing more than just looking, however. Knowing where your money is going and how to diversify your savings so you are set up well for your golden years is crucial.
Do you have any regrets when it comes to retirement savings?