WASHINGTON (TND) — An eye-opening new report says millions of Americans are not financially ready for retirement and savings aren’t a top priority either.
A March report from the Nationwide Retirement Institute says 13% of consumers near retirement age have postponed or are considering postponing plans to retire due to inflation but financial experts say retirement savings was a crisis long before the pandemic.
Sky-high inflation is hurting Americans at the grocery store while busting budgets at the pump.
Those higher prices are pushing retirement savings to the back burner for many. Only 17% report their top financial priority for 2022 is saving for retirement according to a new first National Bank of Omaha study.
“Clearly Americans are not saving enough and we are facing a retirement crisis in this country,” said John Larson with Conduent.
That same survey found that 46% of Americans have less than $15,000 saved for retirement and one-quarter say they have less than $1,000 in overall savings.
Experts say one mistake is waiting too long to start saving.
“You can save smaller dollar amounts in a greater frequency when you are starting sooner and creates an opportunity for more people to save,” said Adam Longlais with Nicolet Bank.
More than half of Americans fear they won’t be able to retire by age 65.
Larson says it’s never too late to start saving, beginning with a 401k, then a health savings account.
“So once you have your employer match, go to your HSA, max out your HSA as much as possible because it has the ability to act as a 401k but it also allows you to access those funds should you need them for medical spend today,” Larson said.
But many are wondering how much they need to retire. Financial planners suggest 80% of your pre-retirement income.
So, if you make $50,000, you should plan to spend $40,000 per year when you retire. That means at a $50,000 salary, you would need $1.2 million for your retirement savings to last 30 years.
