Save more and live simply.
It’s a lesson people, especially millennials, are heeding as more Americans say they’re saving more retirement in 2018 than last year, according to a new Bankrate survey.
Fully 28 percent of Americans are saving more for retirement this year compared with last year, it finds.
Yet while more American workers are boosting their retirement savings, “others are struggling to keep up because of lagging incomes.”
The 28 percent figure is the highest level seen since Bankrate began polling in 2011.
It’s also the fourth consecutive year that more Americans have boosted retirement savings, up from 23 percent in 2017; 21 percent in 2016; 19 percent in 2015; and 18 percent in 2013 (the question wasn’t surveyed in 2014).
Bankrate also found that about 48 percent of working Americans are saving about the same amount for retirement this year as they did last year while 13 percent are saving less today than last year.
Slow income growth holding some workers back
“With soaring costs to buy and rent homes across the country, as well as higher prices for consumer goods, saving for retirement is a struggle for many Americans,” the website notes, before adding, “And that’s problematic.”
Twenty-six percent of workers cited a drop or no change in income as the main reason they haven’t saved more for retirement in the past year.
That’s consistent with federal data that show real wages have barely budged in decades.
Based on today’s average hourly wages, Americans’ purchasing power is the same today that it was in 1978, after adjusting for inflation, according to analysis by the Pew Research Center.
“Stagnant income and rising household expenses mean there is little financial wiggle room for many Americans,” Greg McBride, CFA, chief financial analyst with Bankrate.com, told the site. “To save, or save more, requires paying yourself first through payroll deductions or automatic bank transfer.”
“Some 16 percent of respondents said they’re focusing on another financial priority while 12 percent cited rising household expenses as to why they haven’t saved more for retirement in the past year,” Bankrate concludes. “But not all workers are struggling to save. Some 21 percent of Americans said that they’re comfortable with their retirement savings or contributions.”