Two-thirds of middle-income Americans are saving less than 5% of their annual income for retirement, with nearly a quarter saving nothing at all, according to research from LIMRA.
The research looked at American workers earning $40,000-$99,999. More than eight-in-10 (85%) are saving less than 10% of their income for retirement, the study finds.
The group nearest retirement – those older than 55 – was the largest group of nonsavers, with 26% reporting not saving anything at all. Workers ages 18-34 were doing only marginally better, with one-in-four not setting anything aside for retirement. Among workers 35-54, 20% were not saving for retirement.
“These results, while not surprising, are very troubling,” says Matthew Drinkwater, associate managing director, LIMRA retirement research. “Many Americans will live at least 20 years in retirement, and will need significant savings to ensure their financial security.”
Eight-in-10 say they needed to save more to be on track for retirement, with a quarter saying they need to save an additional 15% or more of their income annually.
Drinkwater notes that while many Americans plan to delay retirement or not to retire at all, research shows that more than half of current retirees retired before they planned, often involuntarily.
“It is important that Americans take the steps to prepare for every contingency while they are drawing an income,” Drinkwater says.
The findings are based on a nationally representative survey of 1,809 Americans who are either the primary financial decision-makers or share responsibility for making financial decisions.