Finance experts encourage employees to continue saving
Most people are not aware of how much they should save for their retirement, while close to half are not minding retirement savings at all, a new survey reveals.
Transamerica Center for Retirement Studies released its 23rd Annual Transamerica Retirement Survey, one of the largest and longest-running surveys looking into retirement and perspectives on aging across different demographics. It was conducted among more than 10,000 working adults, 5,700 of which are working in for-profit companies.
Results reveal about 40% of Baby Boomer, 46% of Gen X and 45% of Gen Z workers only guessed the amount they would need for retirement.
42% of the total participants agreed on the statement, “I prefer not to think about or concern myself with retirement investing until I get closer to my retirement date.” The older the participants are, the more likely they become not agreeable with this statement.
“That’s a big worry because retirement security is shaky enough for many workers and not taking it seriously will have repercussions,” said Catherine Collinson, CEO and president at Transamerica Institute.
“It’s not really negotiable to prefer not to think about it. Estimating savings and retirement income needs and goal setting serves as the basis for future financial security.”
Collinson said that the pandemic and resulting economy have had an impact on workers’ finances and employment as well as their perspectives on retirement.
“Without additional support from policymakers and employers, it will be extremely difficult for many workers to recover,” she said.
Meanwhile, a new study that looked into the perspectives of working adults on retirement savings seemed to echo the findings of the survey.
According to the new Northwestern Mutual Planning & Progress Study, as reported by Yahoo! Finance, workers in the US believe they need $1.27 million to live comfortably in their retirement years. Workers in their 50s believe they need over $1.5 million for retirement. However, on average a US adult would have only $83,300 in savings.
Gen Z workers are the most confident they would be prepared financially when their retirement comes.
On the other hand, older generations expressed pessimistic perspectives, with more than half of Gen X workers believing they won’t be ready and almost half of the Millennial and Baby Boomer participants sharing the same belief.
“Retirement is top of mind for most Americans, more so than it’s ever been before, given what’s going on in the economy, the markets, and with inflation,” said Aditi Javeri Gokhale, chief strategy officer at Northwestern Mutual.
“There’s a growing realization that ‘I need more money for retirement, and I’m not able to retire at the time that I thought I was.’”
