Stashing money away for the golden years can be a huge burden for many people. In fact, saving for retirement is the leading financial stressor for Americans, a new study from Lincoln Financial Group shows. Further, 90% of U.S. residents report stress about their financial situation impacts their daily mood.
The study by the Radnor, Pennsylvania-based financial services company indicated people know that saving for retirement is imperative. Some 57% of Americans say it is important to have room in their budget for a retirement plan. Yet, individuals put household necessities, utilities, and transportation ahead of retirement savings.
“Saving for retirement doesn’t have to be stressful, and it doesn’t have to be difficult,” says Jamie Ohl, EVP, president, Retirement Plan Services, Head of Life and Annuity Operations, Lincoln Financial Group. “It’s all about taking small steps over the course of your working life to help you achieve the retirement you envision.”
Another revelation from the American Consumer Study is that only about half of Americans are confident about saving for retirement, and just a quarter say they don’t plan to retire. The recent study included 2,501 respondents.
The good news is there are steps people can take to help boost their confidence about retirement savings and enhance their ability to retire.
For one, waiting to save can cost you and impact your financial future. This calculator shows the effect that delaying savings can bring. Another point to consider is that a small change now can make a big difference later. For instance, consider cooking your own meal versus eating out once a week.
This calculator shows what that could mean. For instance, that action could add $113,000 to your retirement account.
People also should look at ways to protect their income in retirement. The study suggests many Americans are approaching their retirement years “unprotected”—meaning their savings are not shielded from rising healthcare costs, outliving savings, and other forces. Individuals should talk to a financial adviser to gain options—perhaps utilizing an annuity for instance—to discover ways to help turn retirement savings into sheltered lifetime income.
Interestingly, the study also found that about 1 in 4 Americans don’t plan to retire due to financial uncertainty in the future. Among its findings:
- Forty-nine percent of us plan to retire, while 24% don’t plan to retire.
- Twenty-seven percent will not retire because they do not have a good picture of what their financial future will look like.
- Some 26% of people are looking to live comfortably and keep their current lifestyle in retirement.
- Fourteen percent of Americans plan on beginning a “second career” later in life, while 32% aren’t sure and might consider the possibility.
- Of those wanting to begin a second career, 25% say it is because they want to continue to have some income, and 17% say it is to keep busy and try something different.
- More than 3 out of 4 Americans say they anticipate living in their own home once they are retired. That is particularly true for Young Boomers and Old Boomers (82% and 83%, respectively)
- Forty percent of Americans are not now contributing to a retirement savings plan.
- Some 24% of Americans with a formal retirement plan say “I wish I can retire earlier so that I can enjoy my time off doing personal things.”
- Americans without a formal plan are more indifferent, with 1 in 3 saying “I feel no particular way about retirement.”