While most Americans understand the importance of saving for retirement, taking the necessary steps to build an adequate nest egg continues to lag on their priority lists, according to Capital One ShareBuilder’s Financial Freedom Survey measuring current sentiment and behaviors related to investing and retirement, and gauging America’s progress on the path to financial freedom.
Key findings from the survey include:
- Ninety-three percent of working Americans know they should be contributing to their retirement, but only 72 percent are doing so.
- Saving for kids’ education keeps more Americans up at night than planning for retirement.
- Despite Americans estimating they should be contributing 12.1 percent of their income on average, only an estimated 6.4 percent is currently being saved.
- Fifty-eight percent of Americans plan to retire by age 65, yet nearly the same percentage fear they’ll never save enough.
The survey also found Americans are not saving as much of their income for retirement as they feel they should. While nearly all (93 percent) think they should be contributing some portion of their income toward retirement, and half (50 percent) believe it should be more than 10 percent, only one-fifth are currently saving 10 percent or higher.
“Unfortunately, saving for retirement is often put on the back-burner for what seem like more pressing financial priorities, such as paying for college,” said Dan Greenshields, president of Capital One ShareBuilder, Inc. “Now more than ever, Americans are responsible for ensuring their own financial security during retirement, and the earlier you begin to plan and save, the better.”Stressed Out Over Saving Most Americans are feeling stretched financially, which adds to the challenge of planning and saving for retirement. The survey found that financial stress is keeping three out of four non-retired Americans (75 percent) up at night. The leading cause of sleepless nights for most non-retirees (34 percent) is supporting children and saving for college, while retirement is a top concern for only 13 percent.
- Among non-retirees, women (61 percent) are significantly more concerned than men (52 percent) that they may never save enough for retirement.
- One quarter of non-retired men report they are not at all concerned with the prospect of not having enough to retire, and employed men tend to save a higher percentage of their income for retirement than women (an estimated 7.2 percent vs. 5.6 percent, respectively).
- Non-retired Americans ages 45-64 are more likely to be concerned they’ll never save enough for retirement (at 63 percent), while younger generations (ages 18-34) are less likely (at 52 percent).
- On average, employed Americans believe they should be saving roughly 12.1 percent of their income for retirement – this is nearly double the estimated 6.4 percent of their income that is currently being saved.
- The majority (58 percent) of non-retired Americans are planning to retire by age 65, but 57 percent are concerned they’ll never save enough, with 41 percent believing they are saving less than the average person their age.
- Employed Americans ages 35-64 are significantly more inclined to believe they should be saving more than 10 percent of their income for retirement compared to younger adults ages 18-34 (57 percent vs. 41 percent, respectively).