Personal Finance

55% of working Americans feel they are behind on retirement savings. Here's how to catch up

Key Points
  • High inflation has prompted many workers to put retirement savings on the back burner.
  • But you could have regrets later if you neglect this long-term goal.
Nicoletaionescu | Istock | Getty Images

As it has become more difficult to stretch a dollar at the grocery store and gas pump, some Americans are pulling back on one key long-term goal: retirement savings.

More than half of workers — 55% — said they feel they are behind on their retirement savings, a new survey from finds.

Just 25% of workers have increased their retirement savings this year compared to last year, according to the survey, which was taken in September and included 2,312 adults.

About 34% of workers are contributing the same amount, and 16% are saving less. Additionally, 24% didn't contribute to their retirement savings last year and are not saving this year either.

Inflation has made it harder to save

The overwhelming reason workers cited for not contributing more is inflation, with 54% of Bankrate survey respondents. That was followed by stagnant or reduced income, 24%; new expenses, 24%; debt repayment, 23%; keeping extra cash on hand, 22%; and market volatility, 18%. Of the remaining respondents, 7% said they don't want or need to contribute more, while 5% cited other reasons.

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The results come as the IRS has just announced new contribution limits for retirement accounts in 2023. Workers will be able to contribute up to $22,500 in their 401(k) plans, up from $20,500 this year. The limit for individual retirement accounts will go up to $6,500, up from $6,000 this year.

Those who are 50 and over can sock away even more — $7,500 extra in 401(k) plans in 2023, up from $6,500 this year, and $1,000 more in individual retirement accounts.

Getting close to those limits may be tough for some workers.

"The labor market might be very strong, but we have found that the pay is not keeping pace with inflation," said Greg McBride, chief financial analyst at

"Half of workers that got a pay increase said it wasn't enough to keep up with the higher household expenses," he said.

Separately, a recent LendingClub report found 63% of Americans are living paycheck to paycheck, including almost half of those earning more than $100,000.

"Being employed is no longer enough for the everyday American," Anuj Nayar, LendingClub's financial health officer, told CNBC.

'Biggest financial regret' is not starting to save early

Working baby boomers ages 58 to 76 were most likely to say they feel behind on their retirement savings, with 71%. That was followed by 65% of Gen Xers ages 42 to 57 who said they need to catch up.

Younger generations indicated they are more confident they are keeping up with their retirement savings, with 46% of millennials saying they are behind and just 30% of Gen Z workers.

The results coincide with a key finding from past surveys that the top financial regret Americans have is that they did not start saving for retirement early enough, according to McBride.

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"The closer you get to retirement, the more likely you are to say that that is your biggest financial regret," McBride said.

One key reason why older workers have more remorse is the remaining time they have in the work force is shorter, so there's less time to make up for any savings they feel they missed.

What's more, while they may plan to work longer, circumstances outside of their control may cut their careers shorter.

How to stay on track with retirement savings

The good news is there are steps that workers of all ages may take steps to shore up their retirement confidence, according to McBride.

That includes paying themselves first, utilizing tax-advantaged retirement savings options and capturing their full employer match, if one is available to them, according to McBride.

"Successful saving is all about the habit," McBride said.

"The best way to establish that habit and maintain the habit is to automate your contributions," he said, through payroll deduction into an employer sponsored plan or automatic monthly transfer into something like an IRA.

That way, you won't be tempted to use the money elsewhere.

Plus, if you're making pre-tax contributions, $1 saved will not reduce your net pay by $1.

While younger workers with the longest time horizons have the greatest advantage, it still pays for those who are mid to late career to increase their deferral rates.

Those who continue to invest in this bear market when stock prices are lower stand to reap the most rewards, according to McBride.

"When you look back 10, 15 years from now, you're going to be really glad you stuck with it in 2022," he said.