Data and Research August 22, 2018

Americans Continue to Increase Retirement Savings

Those who did not increase their retirement savings cited stagnant income, other financial priorities, increased household expenses and an unexpected financial emergency as reasons.

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Twenty-eight percent of Americans say they are saving more this year compared to last year, a Bankrate.com survey found.

This is nearly double the percentage increasing their retirement savings since the survey debuted in 2011, when 15% of Americans had done so. Only 13% are saving less than last year, the lowest on record and less than half of the 29% who decreased their savings in 2011.

This marks the fourth consecutive year that Americans have increased their retirement savings, up from 23% in 2017, 21% in 2016, 19% in 2015 and 18% in 2013. (The question was not part of the 2014 survey.)

Older Millennials, those between the ages of 18 and 37, had the highest propensity to be saving more for retirement than last year (39%), compared to 27% of younger Millennials, and 26% of Gen X. Retirement savings by Baby Boomers and the Silent Generation remained steady.

Those who did not increase their retirement savings were asked why. Twenty-six percent said their income had not changed or had decreased, 16% are focused on another financial priority, 12% said their household expenses have increased, and 5% said they were faced with an unexpected financial emergency. Aside from the above cases, 21% said they were “comfortable” with their retirement savings, and 11% “haven’t gotten around to it.” 

“If you’re not saving at least 10% of your income for retirement, raise your contributions to that level without delay,” says Greg McBride, chief financial analyst at Bankrate.com. “And once you’re at 10%, aim to increase that to 15%, which is the target most working Americans should aim for.”

SSRS conducted the landline and cellphone survey for Bankrate.com among 2,011 people in early August.

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Benefits August 22, 2018

Employees Feel Employers Should Help Pay Student Loan Debt

IonTuition finds more than half (52%) of respondents still owe more than $15,000 in student loans, and the year-over-year data shows the number of respondents with more than $30,000 in student loans actually increased over time compared to initial borrowing.

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The 2018 Student Loan Survey Report published by IonTuition highlights lengthening loan terms and greater monthly payment amounts faced by U.S. college students and their families.

And more Americans are having difficulty meeting their loan repayment schedules, the research shows. Overall, 16% of the loans brought onto the IonTuition platform are now delinquent or in default.

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According to the survey report, 56% of the more than 1,000 respondents initially borrowed more than $15,000 in student loans, while just 11% took out less than $5,000. Twenty-six percent initially borrowed more than $30,000 to finance their college education.

IonTuition finds more than half (52%) of respondents still owe more than $15,000 in student loans, and the year-over-year data shows the number of respondents with more than $30,000 in student loans actually increased over time compared to initial borrowing, “thanks to interest accrual.” Other findings show 36% of respondents have a student loan payment that is over $200 per month, while 30% pay less than $100 per month. As the report explains, the number of respondents with payments over $100 has increased or remained the same in all respondent categories since 2015.

The survey respondents included individuals reporting they have fully repaid their student loans. Overall, less than 10% of all respondents fully repaid their loans within 5 years, and one in 10 are already beyond a 10-year repayment period. For those acquiring new student debt, borrowers expect to take longer to pay them down.

According to the survey report, the number of respondents who reported that it will take more than 20 years to pay off their student loans has increased significantly since 2015, jumping from 10% to 16%. 

IonTuition researchers suggest these numbers make it clear that more Americans would benefit from having access to student loan repayment support programs in the workplace. Survey results show only 13% of respondents currently report working for a company that offers some type of student loan assistance.

Respondents feel strongly that employers should help their workers repay their student loan debt, the report highlights. Overwhelmingly, employees agree with the statement, “I would like my company to offer a voluntary student loan assistance benefit.” The same is true for the statement, “I would like the option to choose matching contributions towards my student loans over matching contributions towards a 401(k).”

“Student loan assistance ranks highest among other emerging voluntary benefits,” the report concludes, “including personal financial planning, legal support services, identify theft protection, retail discount programs and pet insurance.”

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