Concerns about the economy have combined with the pandemic crunch that many households have experienced, meaning that saving for retirement has dropped lower on the list of financial priorities, reports CNBC.
In a recent survey conducted in February from First National Bank of Omaha that included over 1,000 U.S. adults, with responses weighted to represent the general population, the top priority for excess money was to increase nonretirement savings, followed by reducing personal debt. Only 17% of those surveyed responded that retirement saving was their top financial priority.
Even more telling is that nearly half (46%) reported having less than $15,000 saved for their eventual retirement, and over half (59%) are concerned that they will have to work beyond 65.
Image source: CNBC
“While it’s a key element of your financial well-being, prioritizing retirement savings depends on where you are in the cycle of thinking about retirement, what you have in savings and your personal situation regarding employment, amount of debt, etc.,” Sean Baker, executive vice president for the individual customer division of First National Bank of Omaha, said in the press release.
This aligns with the recent findings of PwC that determined that a full quarter of Americans currently do not have any retirement savings, and those who do generally do not have anywhere near the 10x annual salary saved that is recommended for preparing to retire at 67, according to Fidelity.
One way to tackle this is to encourage clients to save what they can, when they’re able, even if it means depositing irregularly into a retirement savings account or investing into their retirement income plan.
“A way to manage the demands is to commit to depositing an amount, no matter how small, in a 401(k) or [individual retirement account],” said Kathryn Hauer, certified financial planner at Wilson David Investment Advisors. “Every little bit helps.”
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For more news, information, and strategy, visit the Retirement Income Channel.