Retirement concerns aren’t boosting contributions. Americans can expect to outlive their retirement savings by anywhere from eight to 20 years.
Retirees in the U.S. can expect to outlive their savings by anywhere from eight to 20 years, according to research by the World Economic Forum. Women have it worst and will outlive their retirement savings for at least two years longer than men.
Not saving enough for retirement is Americans’ biggest financial regret, yet less than 30 percent of workers have increased their retirement savings contributions rate this year. Over 20 percent of employees are saving less or not contributing to a retirement fund at all.
Why Aren’t Employees Boosting Retirement Contributions?
“The reasons Americans cite for not increasing retirement contributions indicate a continued lackadaisical approach to retirement savings – whether it’s complacency with current contributions, focus on other financial priorities, rising household expenses or just not getting around to it,” says Greg McBride, chief financial analyst at Bankrate.
Nearly 25 percent of employees didn’t raise retirement savings because they’re comfortable with their current contribution. Considering the $400 trillion global retirement savings gap, it’s worth wondering if those who are comfortable really have enough set aside to get them through retirement. Life expectancy for senior citizens has never been better, which means most Americans’ will need more money saved than they once thought, and that’s before factoring in costs for long-term healthcare.
Stagnant or declining income is the reason more than 20 percent of employees gave for failing to increase contributions to retirement funds in 2019. Over 15 percent of workers focused on another financial priority, like paying down credit card debt, before boosting retirement savings. More than 10 percent of employees blame rising household expenses for their failing to increase retirement contributions. Unexpected financial emergencies kept almost 10 percent of them from boosting retirement savings.
The most concerning response came from the more than 10 percent of workers who just haven’t gotten around to it. It was a more popular response for younger Millennials (16 percent) and households with lower-than-average income (16 percent) than for other groups.
“Saving for retirement needs to be made a bigger priority for the millions of Americans that aren’t saving, got started late, or are behind on their retirement savings,” McBride says.