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America’s workforce is feeling behind on retirement savings, survey says

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It’s no secret the average American is holding onto some retirement preparation anxiety.

According to a new survey from Bankrate.com, 52% of workers have reported feeling behind on retirement savings while more than half with retirement accounts have made an early withdrawal.

Just 21% of those surveyed feel they are on track in terms of savings currently; only 11%, one in nine, feel they are where they should be. 16% have no idea whether they’re on or off track.

Since the coronavirus pandemic sent the U.S. economy into a tailspin, Americans have become more aware of how their retirement funds are matching up. This caused nearly a quarter of Americans to save more post-pandemic than prior to – 9% reportedly saving “much more.”

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On the contrary, just one in seven workers are saving less for retirement now than pre-pandemic with 8% reporting saving “much less.”

Workers in the Gen X generation feel the most behind on savings at 60%, followed by Baby Boomers at 56%, Millennials at 49% and Gen Z at 33%. 

28% of Millennials top the list for the generation contributing more to their retirement funds post-pandemic. 27% of Gen Z, 22% of Gen X and 20% of Baby Boomers are doing the same.

Of those who reported saving less for retirement post-pandemic, 49% attributed the reason to loss of income, 32% to additional expenses, 21% to additional debt and 14% to helping other family members financially.

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51% have withdrawn from retirement accounts early – 31% had done so prior to the pandemic. As a reflection on the pandemic’s economic fallout, one in five (20%) of Americans have made an early withdrawal since March 2020.

Bankrate expressed concern for the 43% of Americans who indicated they’ve never had a retirement account – split between Gen Z (53%) and a half (50%) of workers earning less than $50,000 annually.

More than half of U.S. households earning less than $100,000 annually report being behind on savings while 46% of households earning at least $100,000 report the same. A mere 12% of households earning less than $50,000 per year feel they are on track for retirement.

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“Saving for both emergencies and retirement are vitally important to current and future financial security,” Bankrate Chief Financial Analyst, Greg McBride, CFA commented. “Even a modest emergency fund acts as a buffer from early retirement account withdrawals when unplanned expenses arise, allowing the power of compounding to continue to work its magic.”