When it comes to retirement savings, Americans know they are falling behind — and it's stressing them out.
Northwestern Mutual's 2018 Planning & Progress Study, which surveyed 2,003 adults, found that 78 percent of Americans say they're 'extremely' or 'somewhat' concerned about not having enough money for retirement. Another 66 percent believe that they'll outlive their retirement savings.
Their concerns are valid. A shocking 21 percent of Americans have nothing at all saved for the future, and another 10 percent have less than $5,000 socked away for their golden years, the study found.
Some respondents are making headway. A quarter report having $200,000 or more stashed away, while 16 percent have between $75,000 and $199,999. However, Northwestern Mutual found that, overall, Americans average $84,821 in retirement savings, which is far from enough.
Similar studies back up these findings. Those between the ages of 55 and 64 who have retirement savings only have a median of $120,000 socked away, Bankrate reports, citing data from the Federal Reserve. That's only 12 percent of the $1 million many experts recommend, and it's worth noting that even $1 million doesn't stretch as far as it used to.
Another report from the Economic Policy Institute (EPI), using 2013 data, looked at the mean and median retirement savings of working-age families, which it defines as those with wage-earners between 32 and 61 years old. The mean retirement savings for these families is $95,776 in 2013 dollars. The median, which is typically a better gauge, is just $5,000.
Few people seem to be actively working to improve their situation, either. Almost half of the respondents, 46 percent, in Northwestern Mutual's study say they haven't taken any steps to prepare for the possibility of outliving their savings.
For those who haven't made any moves yet, it's important to get started.
"The good news is that it's rarely too late to start," says Rebekah Barsch, vice president of planning for Northwestern Mutual. "In fact, we often compare financial and physical fitness because the hardest part is taking the first step. However, once people commit to a strategy and start seeing positive results, they're motivated to meet and even exceed their goals."
To ensure that you'll have enough to comfortably cover your expenses in retirement, it's crucial to start investing as early as you can. For most people, contributing to an employer-sponsored 401(k) plan is the simplest way to start saving for retirement. If your employer offers a match, you're essentially getting free money.
If your company doesn't offer a 401(k) plan, or even if it does, consider other helpful, tax-advantaged retirement funds such as a Roth IRA or traditional IRA. Read up on the different types of retirement accounts here.
Anyone looking to lower their expenses can consider downsizing their home, trimming their grocery bill or making it a priority to eliminate debt. And those with the capacity to take on additional work can bring in extra cash by renting out spare rooms, reselling items online or taking on freelance work. Here's how much the most common side hustles pay.
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