You're Not Alone: The Amount Of People Behind On Their Retirement Savings Is Staggering

Everywhere you look, it seems like there's a new way Americans are being financially squeezed. Inflation, car loans (and the high-interest rates associated with them), mortgages, and even student loans are all monthly financial concerns affecting the average American. Not to mention credit card debt, rising homeowner's insurance, and even price hikes at fast-food chains are making it harder than ever to stay financially above water. This hasn't only negatively impacted Americans' ability to save money (e.g., 28% of the country reported having less than $1,000 in savings, according to Forbes), but it could have long-term consequences for retirement.

A CNBC survey found that 40% of American workers are behind on their retirement savings. The biggest factors that have pushed so many to fall behind? Debt and inadequate income. Forty-eight percent of those surveyed reported that paying off existing debt and/or loans, as well as simply not having enough income to put any additional money into retirement, were the main reasons they were behind on their retirement savings journey. Interestingly, 40% also cited starting their savings too late in life as a primary reason they were behind in saving for retirement.

Jacqueline Reeves, the director of retirement plan services at Bryn Mawr Capital Management, explained to CNBC, "There are so many individuals, young, mid-career, and deep into their career, that are not saving enough for a healthy and secure retirement." Of the 37% who reported feeling ahead of/on schedule with their retirement savings, 42% cited starting early as the main reason.

CNBC's survey on retirement and savings highlighted widespread financial concerns across most retiree demographics. Particularly concerning was that 21% of retirees reported having no retirement savings of any kind, while another 15% reported having less than $50,000 saved.

It's also worth mentioning that those with lower annual salaries reported worse experiences during retirement. Thirty-two percent of retirees with annual incomes below $50,000 reported feeling that retirement was worse than they expected (compared to just 20% who reported it was better). Plus, the amount that people think they need to retire comfortably changes every year (2024's magic number was almost $1.5 million). This moving goalpost can make it difficult to know how best to plan ahead, plus it can make it difficult to feel like you're making any substantive progress in your retirement savings goals.

Another sad reality is how much worse off people of color are today when it comes to retirement planning (which largely has to do with the racial wealth gap and the generational consequences of it). CNBC found that Black and Hispanic retirees were more likely to have nothing saved for retirement compared to white retirees. Thirty-five percent of Black survey respondents reported not having any retirement savings, while 29% of Hispanic respondents reported the same, compared to just 18% of white retirees. This is partially due to a lack of generational wealth, and also due to the historically lower wages available to people of color that can lower their overall Social Security benefits in retirement.

According to a new retirement fears survey from LiveCareer, 82% of workers reported considering delaying retirement for financial reasons while 92% reported being afraid they would have to work longer than they originally planned. Interestingly, 80% still reported planning to retire in their 60s (with 46% aiming for their early 60s). However, as Social Security continues to change, this might not be financially viable for many. For instance, recent changes to retirement ages means that anyone born after 1960 isn't eligible for full retirement benefits until age 67. While retirees can still choose early retirement, they face significant cuts to their benefit amounts for doing so. Similarly, those who choose to delay retirement benefits could get up to an 8% increase to their full benefit amount for each year they delay starting benefits beyond their full retirement age.

If you are concerned about not having enough money saved for retirement, there are ways to help (even if you feel like you got a later start than you wanted). For one, making sure to take advantage of automatic options like payroll deduction and deferrals can help you boost your savings without requiring extra thought every month. Similarly, for anyone over age 50, looking into potential catch- up contributions available for your 401(k) plan or IRA could also help you save more later in your career. Plus, it's important to always keep a separate emergency fund to ensure you don't/won't have to pull money prematurely from your retirement accounts (see our guide on how much to keep in your emergency fund).