The current and future state of retirement in the United States is in a crisis. People aren’t saving enough, consumers aren’t sacrificing their imbibing habits, workers aren’t earning enough and interest rates are at record-lows. It seems those on the brink of retirement and those who will be entering into retirement in more than 40 years will have a difficult time attempting to retire.
A new study by Wells Fargo has found that one-third of middle-class Americans aren’t saving for retirement, a lot of respondents tend to think they’ll work until they’re in their 80s (or until they drop dead) and a significant number say they won’t have enough savings for their entire retirement.
“Saving for retirement isn’t easy. It requires sacrifice, and it’s not something people can push off and hope to achieve later in life. If people in their 20s, 30s or 40s aren’t saving today, they are losing the benefit of time compounding the value of their money. That growth can’t be made up later, so people have to commit early in life to make savings a regular discipline year after year – it is the only way most people will achieve their financial goals to carry them through retirement,” said Joe Ready, director of Institutional Retirement and Trust, in a statement.
Here are some of the findings from the study:
- 68% say saving for retirement is a lot harder than first anticipated
- 38% concede to sacrificing a lot to save money for retirement
- 72% of Americans believe they should have started saving earlier
- Americans have saved a median $20,000 for retirement
- 22% would rather die than outlive their savings in retirement
Respondents also admitted that they often get depressed when they think about their lack of retirement savings. Meanwhile, most people plan to forego many enjoyable purchases, such as vacations, cars and restaurants, to save for retirement.
“People who have a written plan for retirement are helping themselves create a future on their own terms, with a foundation built on saving, and hopefully, investing.As evidenced by the difference in monthly savings amounts for those with a written plan and those without, it is clear that a plan makes a sizeable difference,” added Ready.
The financial institution released a series of tips to start saving money for retirement:
- Start saving immediately
- Get a company match
- Boost your savings rate
- Do not touch your savings
- What type of saver are you?
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