Over Half of Americans Satisfied With Retirement Nest Egg
Over half of residents to a recent Transamerica Center for Retirement Studies believe they are building or have created a large enough nest egg for retirement.
According to the institute’s latest study, “Life and Money: Retirement Security in the USA,” 59% of Americans say they have built enough income for their golden years.
Still, Americans continue to worry over their savings, as they grapple with higher costs of living, impacts of artificial intelligence (AI) technology, impending Social Security insolvency, and the volatile market, says Catherine Collinson, CEO and president of the Transamerica Institute and TCRS. According to the study, 46% of those surveyed are worried that the surge of AI and robotics technology will make their job skills obsolete.
“Retirement is a core tenet of the American dream. It is a chapter in life that brings time and freedom for travel, family and friends, hobbies, and giving back to our communities,” said Collinson. “Today, a secure retirement may be out of reach for many Americans.”
Only 15% of Americans surveyed are “very optimistic” about their future, with many who say their day-to-day life has been impacted by the economy (56%), healthcare costs (44%), housing prices (43%), and extreme weather and natural disasters (28%).
This is as they continue to juggle competing financial priorities, like saving for retirement (44%), building emergency savings (38%), covering basic living expenses (34%), and paying off credit card debt (33%).
Despite the worries from many, 66% are still confident in their ability to have a comfortable retirement, with 22% who report feeling “very confident” and 44% who are “somewhat confident.”
Those who have yet to retire have also grown their retirement savings potential. The average savings percentage increased within the last five years from 65% to 69%, while household savings in retirement accounts grew from an estimated median of $44,000 to $56,000.
There’s still work to be done however, says Collinson. Just one in five Americans say they have “a lot” of working knowledge about personal finance, like managing money, investments, debt, risk, and taxes. Less than half (49%) have budgeted on a regular basis, managed savings and investments (37%), secured online accounts (33%), financial planning (32%), expanded their knowledge of personal finance (30%), or have done any tax planning (22%).
Further, 23% surveyed said they have a financial strategy for retirement in the form of a written plan.
Collinson called on policymakers to implement legislation that could support Americans save for retirement and afford day-to-day costs.
“Strengthening the U.S. retirement system requires addressing the ever-changing realities Americans are facing, so that they can afford everyday life, have income to save and invest, gain continued access to meaningful employment, and build resilience to adapt to change,” said Collinson. “Americans also need policymakers and public-private partnerships to ensure the sustainability of safety nets, such as Social Security and Medicare, and future-proof our retirement system.”
Transamerica’s study provides a 2020 to 2025 trend analysis of 10 indicators of retirement security since the COVID-19 pandemic and is based on surveys of over 60,000 U.S. residents ages 18 and older.
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with nearly a decade of experience and a passion for telling stories and reporting news. She is originally from Queens, New York, but now resides in Denver, Colorado.