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68% of Americans Think They Are On Track for Retirement, But Worry it Won’t Last
Sixty-eight percent of savers with access to a retirement plan at work believe they are on track with retirement savings, up 12% from last year, due in part to improved market conditions. But for those who feel off-track, long-term uncertainty about how much savings (41%) or retirement income they will need (43%) are top of mind.
Jul. 11, 2024
While overall retirement confidence is up year over year for Americans according to BlackRock’s ninth annual Read on Retirement survey, a closer look at the data reveals rising optimism is not consistent for all respondents, and many are uncertain about long-term planning. Multiple groups of respondents across generation and gender cohorts reported confusion about how much to save, worries about outliving savings, and uncertainty in how much income they will need in retirement.
Anne Ackerley, Senior Advisor on Retirement, BlackRock, said, “The journey to retirement is personal, but the challenges are shared. Our research continues to underscore how complicated the path is for Americans when planning for retirement. This is an important moment to rethink retirement, and we are committed to convening conversations around ways we can make retirement investing simpler, more accessible, and more affordable for as many people as possible.”
Importance of Access
BlackRock’s report highlights how access to solutions that make it easier for people to save and invest for retirement could help more individuals feel more secure. Sixty-eight percent of savers with access to a retirement plan at work believe they are on track with retirement savings, up 12% from last year, due in part to improved market conditions. But for those who feel off-track, long-term uncertainty about how much savings (41%) or retirement income they will need (43%) are top of mind – indicating access to better planning tools and solutions could help. Uncertainty is even higher for respondents without access to a workplace savings plan: only 47% say they feel on track for retirement in general, consistent with responses from the previous two years (51% in 2023/2022).
Employers Can (and Want to) Help
Employers are also increasingly concerned about their employees’ long-term retirement preparedness. Only 58% of plan sponsors believe participants are on track with their retirement savings, vs. 64% in 2023. Additionally, 72% of employers feel the risk of outliving savings has become even more important in the current economic climate, and virtually all – 99% – of plan sponsors feel responsible to help. These employer concerns track with a top worry among survey respondents: for the past three years, around two-thirds or more of respondents fear they will outlive their savings, with 60% of respondents reporting this as a concern in 2024.
Additionally, the survey highlights contrasts between genders—with men more confident than women—and among generations.
Gender: A Confidence Gap:
Only 59% of women surveyed report they feel on track for retirement versus 75% of men. Additionally, 70% of women agree it is difficult to know how savings will translate into monthly income, versus 56% of men, and 65% of women worry they will outlive their retirement savings, vs. 57% of men.
Gen Z: “Ahead of their Time”
Gen Z feels most on track (77%) to retire with the lifestyle they want, yet 69% worry about outliving their retirement savings and 60% say they will put off planning for retirement income until they retire. Luckily, many Gen Z respondents are open to guidance – though 63% say they do not understand how to manage their retirement investments, 47% report they are working with financial advisors for retirement planning, with the majority (70%) reporting they found an advisor through their employer.
Millennials: “Feeling the Squeeze”
More than half (56%) of Millennials say they worry about outliving their retirement savings and report additional complications to their long-term planning. As many try to balance savings for both near- and long-term objectives, 62% report they also carry credit card debt – more than any other generation.
Gen X: “Coming into Focus”
Gen X is the least likely to feel confident about retirement, with only a little over half (60%) feeling on track, and 63% reporting they worry about outliving their retirement savings. Despite this, Gen Xers are the least likely to use financial advisors for retirement planning (40%). Over half (54%) of Gen X respondents who say they are not on track believe they should be saving more. However, only 31% of those eligible are electing to make catch-up contributions.
Baby Boomers: “Reflecting on Income”
Baby Boomers are closest to retirement, and some are already retired. Over two-thirds (67%) of Baby Boomers who are still working feel it would be helpful to receive education on retirement income strategies well before retirement. While most Boomers (68%) feel on track for retirement, those who don’t say uncertainty about how much to save (58%) and how much income they’ll need (51%) are factors. For retired Boomers, 85% report that secure income makes a bigger difference than they thought it would in retirement and 94% believe employers should prioritize providing employees with secure income options through workplace plans.
“Confidence in retirement has varied for the last nine years—and while we have seen increases when markets are up—when we look at sentiment broken out by gender, generation, and access to a retirement savings plan, it tells a complicated story,” said Rob Crothers, Head of U.S. Retirement, Global Product Solutions. “While there is no one, single retirement solution that works for all, we believe providing financial resources, strategies, and tools for all Americans is a critical first step in reducing complexity for those who are clearly struggling to understand their path to retirement.”