Data and Research December 6, 2016

Americans Lagging on Retirement Savings

However, a survey finds they are managing bills and debt.
Reported by

Fifty-one percent of Americans worry about their financial situation and only 37% are confident they are track for a comfortable retirement, according to the 2016 EY Financial Wellness Assessment, based on a survey of 4,000 people conducted between August and October.

Asked when was the last time they tried to figure out how much they will need in retirement, 41% said it was within the last 12 months. However, 67% of those between the ages of 18 and 25 have never thought about retirement planning, and 33% of those older than 50 have never tried to figure out how much they will need to comfortably retire.

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Eighty-two percent contribute at least 4% of their salary to retirement savings, yet 14% contribute less than 4%.

Sixty-nine percent said at least a portion of their portfolio is invested in a cash-type investment such as a money market or stable value fund. Conversely, 51% said they would not move their money out of stocks into safer investments in the event of a market downturn.

Forty-one percent are satisfied with their financial situation. However, among those 18 to 25, 35% are dissatisfied with their current financial situation. Exactly half of those between the ages of 50 and 64 are satisfied—representing the most satisfied of all age ranges.

NEXT: Timeliness of paying bills

Seventy-one percent of the respondents said they have never paid a bill late. However, 20% said they were tardy on a bill once or twice in the past 12 months.

Seventy-four percent said their debt is manageable, and 9% are carrying no debt at all. Among those 18 to 25, 66% said their debt is manageable. Among those 50 and older, that jumps to 77%.

Ninety percent said their household spending is less or equal to their household income. “This shows a conscious effort across all generations to effectively manage their cash flow, and having a plan on where to best use the surplus they have will be key to improving their financial health,” EY said.

If an unexpected financial emergency arose, 87% said they are confident they could come up with $2,000. Among those 65 and older, 95% are confident they could come up with these funds. Even 80% of 18- to 25-year-olds said they could access this amount of cash.

Sixty-three percent of those who have credit cards pay the balance in full each month, and 28% pay more than the minimum due. Only 6% pay only the minimum.

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