Retiring comfortably is the ultimate financial goal for many people. But a new Bankrate survey shows that many Americans are behind on their retirement savings, and they’re increasingly unsure if they’ll be able to retire comfortably at all.
More than half (57 percent) of Americans working full-time, part-time or who are temporarily unemployed feel behind on their retirement savings, according to Bankrate’s latest Retirement Savings Survey. Many are pessimistic they’ll be able to meet their goals — 48 percent of workers with a specific retirement goal in mind don’t think it’s likely they’ll be able to save that much.
Americans are unable to meet their retirement goals as they struggle financially due to high inflation, high interest rates and a weakening job market. Some may also be deprioritizing their retirement contributions to focus on paying for their day-to-day essentials. But, that puts them at risk of being unable to retire in their golden years.
Read on to learn how workers feel about their retirement savings in today’s economy.
Given the sharp divide among those who express confidence, or lack of it, that they’ll be able to retire comfortably, we see a continuing pattern in our country of the ‘haves’ and the ‘have nots.
— Mark Hamrick, Bankrate Senior Economic Analyst
Bankrate’s key findings on retirement savings
The majority of American workers feel behind on retirement savings
More than half (57 percent) of workers think they’re behind on where they should be on their retirement savings. Specifically, 35 percent think they’re significantly behind on where they should be, and 21 percent think they’re slightly behind. That’s roughly the same as last year, when 56 percent of workers said they’re behind where they should be on their retirement savings:
Source: Bankrate survey, August 19-21, 2024
Note: Percentages are of U.S. adults who are working full-time, part time, or who are temporarily unemployed
Only 15 percent of workers feel ahead of where they should be, including 9 percent who feel slightly ahead and 6 percent who feel significantly ahead. Another 22 percent feel they’re right on track with retirement savings.
Older workers tend to think they’re behind where they should be on their retirement savings, including 68 percent of Gen X workers (ages 44-59) and 66 percent of baby boomer workers (ages 60-78). Younger generations are more optimistic: 53 percent of millennial workers (ages 28-43) and 40 percent of Gen Z workers (ages 18-27) feel that same way.
“A good number of these workers who feel or are behind on their savings are many years, or even decades away from traditional retirement age,” says Bankrate Senior Economic Analyst Mark Hamrick. “Those who strive to prioritize retirement savings, as they should, have reason to believe they can achieve their goal. It takes information, focus and hard work, but the good news is that it can be done.”
Younger Americans are likelier than older generations to feel ahead or on track with their retirement savings. More than 1 in 5 (22 percent) Gen Z workers and 17 percent of millennial workers feel ahead of where they should be on their retirement savings, compared to 11 percent of Gen X workers and 10 percent of baby boomer workers.
Additionally, 29 percent of Gen Z workers and 23 percent of millennial workers feel right on track, compared to 18 percent of Gen X workers and 20 percent of baby boomer workers.
Retirement progress by income and education
Education level-wise, workers with at-most some college under their belt (or a two-year college degree) are the likeliest to feel behind on their retirement savings:
- No high school/high school graduate: 59 percent
- Some college/two-year degree: 61 percent
- Four-year degree: 53 percent
- Post-graduate degree: 48 percent
Also, lower-income workers are the likeliest income bracket to feel behind on their retirement savings:
- Under $50,000 per year: 64 percent
- $50,000-$79,999 per year: 58 percent
- $80,000-$99,9999 per year: 55 percent
- $100,000 per year or more: 50 percent
Many workers are growing their retirement savings, but more than 1 in 3 are lagging behind
If you feel behind on your retirement savings, a great move would be to increase your retirement contributions now and give those savings more time to grow due to compound interest. Today, that’s what the majority of workers are doing. At least 1 in 4 workers are contributing more (27 percent) or about the same amount (36 percent) to their retirement savings, compared to a year ago.
However, a sizeable percentage of workers are contributing less to their retirement savings than they were a year ago (16 percent), or they weren’t contributing last year and aren’t contributing now (21 percent):
Source: Bankrate survey, August 19-21, 2024
Note: Percentages are of U.S. adults who are working full-time or part time (or who are temporarily unemployed)
Those who only live for today are putting themselves at risk for a poor tomorrow, or in this case an underfunded retirement. For those still many years away from traditional retirement age, the benefit of compounded investment returns can truly pay a significant dividend.
— Mark Hamrick, Bankrate Senior Economic Analyst
Gen Z workers, who may have just started saving for retirement, are the likeliest generation to be contributing more to their retirement savings compared to a year ago:
- Gen Z workers: 30 percent
- Millennial workers: 27 percent
- Gen X workers: 29 percent
- Baby boomer workers: 17 percent
On the other hand, baby boomer workers, who are closest to retirement age, are the likeliest generation to be contributing less to retirement than they were a year ago:
- Gen Z workers: 14 percent
- Millennial workers: 17 percent
- Gen X workers: 15 percent
- Baby boomer workers: 21 percent
Around 1 in 3 workers think they’ll need over $1 million for retirement
No set amount of savings guarantee you’ll have a comfortable retirement, but common personal finance advice typically recommends saving eight times your salary by your 60th birthday.
Americans, however, have a wide range of opinions on how much they’ll need to save for retirement. Respondents in Bankrate’s poll feel they’ll need a median of $875,000 to retire comfortably, and 35 percent think they’ll need more than $1 million.
Another 23 percent of workers don’t know how much they’ll need in retirement:
Source: Bankrate survey, August 19-21, 2024
Note: Percentages are of U.S. adults who are working full-time or part time (or who are temporarily unemployed)
Millennial workers are the most common generation (40 percent) to say they’ll need more than $1 million to retire comfortably:
- Gen Z workers: 31 percent
- Millennial workers: 40 percent
- Gen X workers: 37 percent
- Baby boomer workers: 22 percent
On the other hand, Gen Z workers are the most common generation (28 percent) to say they don’t know how much they’ll need for retirement. Concerningly, 26 percent of baby boomer workers also say they don’t know how much they’ll need for retirement, followed by 21 percent of millennial workers and 20 percent of Gen X workers.
“While I appreciate candor, it is quite suboptimal that nearly 1 in 4 American workers say they don’t know how much it will take to fund their retirement and live comfortably. They should elevate this task on the financial to-do list,” Hamrick says. “Among the first necessary or helpful steps along the journey toward success is to identify a goal and to have a plan and process. To do anything else is the financial equivalent of driving without a seatbelt, or worse, with blinders on.”
A retirement calculator can help you find your savings target
Hamrick recommends using a retirement calculator to make finding your savings target easier. Figuring out how much money you need to save can be tricky, but Bankrate’s calculator takes the guesswork out of planning for retirement.
Only around half of workers think they’ll be able to save enough to meet their retirement goals
No matter what their goal is, the American workforce is expressing less confidence in their retirement goals year-over-year. Nearly half (49 percent) of workers with a retirement goal in mind say it’s likely they’ll be able to save that much, down from 52 percent in 2023.
A similar percentage (48 percent) of workers with a retirement goal in mind say it’s unlikely they’ll be able to save that much, up from 45 percent in 2023:
Source: Bankrate survey, August 19-21, 2024
Note: Percentages are of U.S. adults who are working full-time or part time (or who are temporarily unemployed) and have a retirement goal in mind.
Compared to younger generations, older generations are far more likely to have low confidence in their retirement savings. More than half (55 percent) of Gen X workers and baby boomer workers with a retirement goal in mind say they think it’s unlikely they’ll be able to save that much. That’s compared to 43 percent of millennial workers and 38 percent of Gen Z workers with retirement goals in mind.
Continuing the trend of younger workers feeling optimistic about their retirement goals, 56 percent of Gen Z workers with a retirement goal in mind think it’s likely they’ll be able to save that much. In comparison, 53 percent of millennial workers, 44 percent of Gen X workers and 43 percent of baby boomer workers with a retirement goal in mind say the same.
Bottom line
Whether your goal is to save $1 million or $100,000, it’s important to begin saving for retirement early. Savings put aside today will gain compound interest, or gain interest on interest, which will snowball over time until you retire. For more on retirement, including the difference between a Roth IRA and a 401(k), and how to maximize savings on a budget, check out our guide to saving for retirement.
Remember — the best financial decision you can make for yourself tomorrow is to start saving today.
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Bankrate commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 2,445 U.S. adults, among whom 1,279 were members of the workforce. Fieldwork was undertaken between 19th – 21st August 2024. The survey was carried out online and meets rigorous quality standards. It employed a non-probability-based sample using both quotas upfront during collection, followed by a sample matching process and then a weighting scheme on the back end designed and proven to provide nationally representative results.
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