GoBankingRates: Nearly 30% of American Workers Have Zero Retirement Savings

Stressed Over MoneyMany Americans are facing a very real possibility of retiring with inadequate savings.  A pair of articles in Employee Benefit News and BenefitsPro covered a recent survey from personal finance website GoBankingRates, which found that nearly 30% of workers have zero dollars saved for their post-working years.  Unless changes are made, the retirement crisis that experts have long warned about may be inevitable.

Here are some of the alarming findings from the GoBankingRates study, which surveyed more than 1,000 American adults about their long-term savings:

  • 28% have no retirement savings
  • 39% of respondents said they aren’t currently contributing to a retirement fund
  • 30% doubt their ability to retire at all

Why the pervasive lack of retirement readiness?  Employers have largely moved away from offering pensions and defined benefit plans, which used to offer guaranteed retirement income.  Now, it’s up to employees to plan and set money aside for retirement on their own, and many don’t take the initiative to save adequately, if at all.  Additionally, many American households lack good savings habits, leaving them vulnerable to shortfalls in their later years.  Many individuals are more focused on meeting near-term financial needs, and as a result, put off or forego long-term savings.  Finally, low-income workers or employees who don’t have access to a retirement savings plan at work are often challenged to build a sufficient nest egg for the future.

The impact of inadequate retirement savings has the potential to be monumental, creating widespread financial insecurity for retirees and causing a heftier reliance on Social Security benefits, putting even more of a strain on an already fragile system.  A lack of savings and the resulting stress can also have a negative impact on individuals’ mental health and overall financial well-being.

Employers can help encourage workers to kickstart their savings for the future by taking a more personalized approach to retirement plan education, tailoring messaging to employees’ specific age and stage of life.  It can also be helpful for employers to educate their workforce on the specific benefits of contributing to a retirement plan and the long-term potential to grow their savings.  Finally, employers should be mindful of implementing more inclusive policies, including extending retirement benefits to ALL employees, full- or part-time, regardless of income level.

The findings from the GoBankingRates survey make it clear: Americans’ lack of retirement preparedness demands urgent attention.  Employers, policymakers, and individuals must work together to ensure a more secure financial future for all Americans.


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