Inflation Devastating Retirement Plans for 55% of Americans
Nearly a quarter, 24%, stopped contributing to their 401(k) retirement plan last year and are still making no contributions this year, either.
The No. 1 reason those who are contributing less or nothing at all give is inflation, cited by 54%, followed by stagnant or reduced income (24%), new expenses (24%), debt repayment (22%), a desire to have more cash on hand (22%) and market volatility (18%).
Just 20% of workers feel that they are on track for a successful retirement, and 15% think they are ahead of where they should be.
“It has been well-chronicled that inflation has outpaced the growth in average hourly earnings and squeezed household budgets, and a limited capacity to increase retirement savings is a byproduct of that,” says Greg McBride, chief financial analyst for Bankrate.
The rising cost of necessities — food, shelter and energy — as opposed to discretionary spending is draining Americans’ budgets, making saving for retirement, already difficult for many, even more of a challenge, McBride says.
The survey did not take into account the extreme stock and bond market volatility that has been plaguing 401(k) and other retirement savings plans this year.
Fifty-five percent of working Americans say they are behind on their retirement savings , according to a Bankrate.com survey. Thirty-five percent say they’re significantly behind, and 20% feel slightly behind.
Baby Boomers are even more inclined to report being in bad shape with their retirement savings , with 71% reporting that they are behind. Even 46% of high earners say they are remiss when it comes to their retirement savings .
Nearly a quarter, 24%, stopped contributing to their 401(k) retirement plan last year and are still making no contributions this year, either. Sixteen percent are contributing less.
The No. 1 reason those who are contributing less or nothing at all give is inflation, cited by 54%, followed by stagnant or reduced income (24%), new expenses (24%), debt repayment (22%), a desire to have more cash on hand (22%) and market volatility (18%).
Just 20% of workers feel that they are on track for a successful retirement , and 15% think they are ahead of where they should be.
“It has been well-chronicled that inflation has outpaced the growth in average hourly earnings and squeezed household budgets , and a limited capacity to increase retirement savings is a byproduct of that,” says Greg McBride , chief financial analyst for Bankrate.
The rising cost of necessities — food, shelter and energy — as opposed to discretionary spending is draining Americans’ budgets, making saving for retirement , already difficult for many, even more of a challenge, McBride says.
The survey did not take into account the extreme stock and bond market volatility that has been plaguing 401(k) and other retirement savings plans this year. Year to date, the S&P 500 Index is down 20.28%, with intraday movements of as much as 5%.
