Moving into the New Year,
Americans’ prospects for a comfortable retirement are not looking too bright. A
year-end report by NerdWallet finds that only 29% of respondents reported
feeling confident that they saved enough for retirement this year. Nearly one
in three aren’t saving at all.
The survey also revealed major
anxiety over lack of savings, and other financial obligations that may be
forcing retirement savings to take a back seat. The top financial concerns are health care bills and expenses
(35%), lack of emergency savings (35%), lack of retirement savings (28%) and
credit card debt (27%).
Not surprisingly, the Centers for
Medicare & Medicaid Services predict health care spending to increase at an
average of 5.8% per year between 2015 and 2025, and the U.S Department of
Health and Human Services projects per-person cost in 2016 to top $10,000 for
the first time. Moreover, NerdWallet’s analysis found that credit card debt
averages at $16,060 and has increased 11% in the last decade.
“Every dollar Americans have to
put toward health care, debt and other expenses is a dollar that isn’t saved
for retirement,” says Kyle Ramsay, CFA, head of investing and retirement for
NerdWallet. “This struggle to keep up with competing financial priorities is
part of why Americans of all ages are falling behind in their retirement
And 2017 may not be any better
for nest eggs. Of the 70% of people saving for retirement, only 32% plan to
increase contributions into their work place retirement accounts.
The survey results also offered
some interesting insight into how different generations approach retirement
planning. Those between ages 45 and 54 were the most likely to be concerned about retirement saving.
Of these individuals, only 20% reported feeling confident that they saved
enough this year. Forty-three percent of Millennials, defined
in the study as those between ages 18 and 34, are not saving for retirement at
all. This is true for 30% of all respondents.
NEXT: Not Saving Correctly