Experts weigh in on what consumers can do now to be prepared for retirement
Whether retirement is around the corner or a bit farther down the road, its never too early to start preparing.
However, a new survey conducted by FlexJobs found that 35% of Americans arent yet saving for their retirement years.
Keith Spencer, a career expert at the company, shared his best insights on the topic with ConsumerAffairs, including the roadblocks to saving for retirement, what younger consumers should know, if its ever too late to start saving, and more.
Whos saving and whos not?
For the study, FlexJobs interviewed 2,000 U.S.-based workers between June 11 and June 23, 2024. The group answered questions about their current and future retirement plans, when consumers should have access to their Social Security benefits, and more.
Overall, 65% of the survey respondents reported they are currently saving for retirement, with 35% not yet starting their savings plans. Of that group,20% said they arent currently saving, but have plans to start in the future.
While the percentage of men and women saving for retirement were close 61% and 52%, respectively, the major differences were seen across generations.
Baby boomers represented the largest percentage of retirement savers, with 61% saying theyve been saving for retirement. On the other hand, 58% of Gen Xers and 46% of millennials reported the same.
However, over 25% of millennials and nearly 20% of Gen Xers said they arent currently saving for retirement but plan to start in the future.
These results arent wholly surprising, as baby boomers are closer to retirement age and have likely had a longer period of time to save, Spencer explained. Those who are at earlier stages in their careers may also have competing financial priorities, like student loan debt, which can impact their ability to save. Similarly, different generations have experienced varying economic conditions, which could disproportionately affect career opportunities and savings potential.
Is it too late to start saving?
If your retirement years are approaching and you havent yet gotten started saving, is it too late? According to Spencer, the answer is no.
Its never too late for consumers to start planning and saving for retirement, he said. Its important to begin by establishing some clear retirement goals that account for factors like your ideal retirement lifestyle and your target retirement age.
From there, you can start creating a budget, tracking your income and expenses, and prioritizing saving wherever possible. Consumers should also explore any employer-sponsored retirement plans that might be available to them through their workplace, which can be particularly beneficial if their employer offers matching contributions.
Having said that, its also important for consumers to know what roadblocks exist when it comes to saving for retirement. Spencer explained that there are several factors that can make it harder to save:
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Financial constraints lower income, higher debt, or unexpected/emergency expenses
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Market volatility
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Societal spending pressures
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Caregiving responsibilities
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Lack of financial literacy
Start saving early
Something younger consumers should consider about retirement plans: start saving as early as possible.
Young consumers can benefit from starting to save early, even if only small amounts, and can also consider automating their savings by establishing automatic transfers from their checking account to their retirement accounts, Spencer suggested.
Those who are at early stages of their career should also make sure they are leveraging employer-sponsored plans, exploring other options like Roth IRAs, and potentially prioritizing high-growth investments.
Photo Credit: Consumer Affairs News Department Images
Posted: 2024-08-20 11:09:23
