Most Worker’s Retirement Expectations Exceed Their Savings
August 31, 2021
Most workers over the age of 40 do not have sufficient retirement savings and are not saving enough to catch up, according to a recent survey from the Insured Retirement Institute. Even worse, most workers still expect to be able to retire on time or early and are overestimating how much income their savings will generate.
The survey found that more than half of Americans over the age of 40 have less than $50,000 saved for retirement. Everybody’s savings goal will depend on their personal goals and circumstances, but experts generally suggest that workers have 10 times their yearly salary saved before retiring.
Despite this shortfall, the majority are not increasing the amount they save to catch up. Nearly 60% of the survey’s respondents said they save less than 10% of their income, and a third says they save less than 5%. Moreover, their expectations for retirement exceed their savings. The survey found that more than half of U.S. workers think they will need to generate income of $55,000 per year in retirement. One-third think they will need $75,000 per year.
Even in the face of low savings and lofty income expectations, most Americans are optimistic about their retirement plans, with nearly half saying they expect to retire at age 65 or earlier. Despite their confidence, the majority did express some regret that they are not closer to their financial goals. Nearly 70% said they wish they had started saving earlier.