When asked for their most common financial regret, Americans yet again pointed to a lack of retirement savings as the top pick.
For the third consecutive year, “not saving for retirement early enough” led consumer financial firm Bankrate’s list of money regrets, with 18% of respondents selecting that option as their number-one choice. Not saving for emergency expenses followed closely behind with 14%, followed by taking on too much credit card debt in third place at 10%.
Bankrate cited data from the Center for Retirement Research (CRR) at Boston College, which recently found that half of all working adults believe they won’t be able to maintain their standard of living in retirement — along with Federal Reserve reporting showing that only half of middle-class Americans have any kind of retirement account, with median balance of $25,000.
“The figures are even more scary if you look at households helmed by someone between the ages of 55 and 64, or the decade before retirement,” Bankrate notes in its analysis of the survey results.
Among that group, just 60% have saved for retirement and have a median balance of $120,000 — far below the 11 times’ final salary that many financial planners recommend.
And even those who said they regret not saving for retirement earlier aren’t necessarily taking action: A quarter of respondents who said they had any kind of financial regret reported having no plans to remedy the situation, with less than half — or 49% — saying they were already dealing with the problem. About 6% said they’d tackle the issue in more than a year, with just 19% saying they’d look into fixing it within the current year.
The grim retirement statistics form what Bankrate calls a pair of “savings crises” affecting American households, with both long- and short-term problems. Not only are Americans not prepared for retirement, the firm points out, but they have an average of less than $4,000 available in savings — well below the $23,000 that they’d likely need to pay for six months’ worth of expenses amid an unexpected emergency.
Bankrate recommends that Americans of all ages get out of the habit of putting specific dollar figures on amounts they should be both spending and saving, with an emphasis on percentages that more accurately reflect their earning and spending trends.
“Get used to saving 10% of your pay in an employer-sponsored 401(k) including any match, or in an IRA,” the company concludes. “You’ll have less to regret later in life.”
Written by Alex Spanko