Menu Close

Americans say 5 obstacles hold them back from saving enough for retirement, but it doesn't have to be that way

This post was originally published on this site
  • Americans say their retirement savings suffer because of five major factors. 
  • They say that market volatility, unexpected expenses, and monthly expenses keep them from saving. 
  • Debt also keeps Americans from saving more, with education and credit card debt the most common. 
  • Read more Personal Finance Insider coverage »

Americans want to start saving more for retirement post-pandemic. However, several factors are holding them back. 

From high costs of living to student loan debt, Americans are struggling with several factors as they try to save and invest more for retirement. That’s according to an April 2021 Schwab survey of 1,000 Americans ages 25 to 70 who have already started saving for retirement. 

The survey data showed that while Americans want to save more, they’re held back by five factors: market volatility, living costs, unexpected expenses, credit card debt, and student loan debt. But, largely, these factors can be overcome.

Market volatility prevents 32% from saving for retirement

The stock market goes up and down, and that can be nerve-wracking. But, it doesn’t have to be that way. 

Paying too much attention to the market can be a bad thing, and cause you to think too much about short-term losses and gains rather than long-term growth. 

By staying the course with your investing, it’s possible to make gains over the long term. To do this, experts advise making it harder to constantly check your account, such as deleting investing apps from your phone. Ignoring the day-to-day turns of the stock market could help you feel more confident as an investor. 

Unexpected expenses keep 29% from saving for retirement 

Many people find that unexpected expenses pop up constantly, but there are ways to keep them from being such a burden. 

While you can’t stop them, you can be prepared. An emergency fund or savings account that consists of three to six months’ worth of expenses can help you handle the unexpected. If something comes up, it’s possible to dip into the fund to pay the bill, allowing you to stay afloat and keep working towards your goals. 

Keeping up with monthly expenses is a struggle for 27% of Americans

Over a quarter of Americans say that day-to-day expenses keep them from saving more. Months of a global pandemic, along with rising living costs, are a concern for many Americans every month. And large household debts put a lot of saving on hold in favor of repayment.  

Outside of that, many Americans struggle with overspending, and that’s something that can be controlled. Making a budget and starting to live below your means could help you get control of your financial life. 

Making a budget can be a smart move for anyone, no matter your income level. Start by listing out expenses and income, and from there, look at where your spending goes each month. Saving and investing might come much easier once you know where you’re overspending. 

Paying down student loan and credit card debt hold back many more 

About 21% of Americans say that education expenses keep them from being able to save, including things like student loans. And 20% say that credit card debt keeps them from saving. 

Paying down credit card and student loan debt isn’t always possible to do quickly. But consolidating debt, refinancing private student loans for a lower interest rate, and asking for lower interest rates from lenders could help you kickstart your payoff journey.