This is not what your retirement porfolio should look like, BlackRock says.

Americans have too much of their assets in cash — and it’s hurting their retirement.

That’s the conclusion of BlackRock in its latest Global Investor Pulse survey, which found that Americans hold 65% of their net worth in cash instruments.

This is “far too high an allocation to achieve their retirement goals, given low interest rates and the diminishing purchasing power of their cash related to the pressures of inflation,” the report says.

The survey included 4,213 people.

Ideally, Americans believe they should have 33% of their net worth in cash, but that’s not what’s happening.

The current asset allocation of American portfolios according to the survey is 65% cash, 18% equities, 6% bonds, 4% property, 2% alternatives and 5% listed as “other.”

“A key obstacle is the feeling of security that cash brings,” the report says.

According to the survey, the respondents said that saving money makes them feel secure (39%), hopeful (29%) and confident (28%), while investing money makes them feel risky (37%) and nervous (35%).

The survey finds that more than one-third (36%) of Americans are afraid of taking risks with money or losing money, although only 7% said that they actually have lost a lot of money in past investments.

According to the survey, nearly four in 10 Americans said they wanted to have “cash saved as a security blanket or reserve for unforeseen events before I can think about investing.”

Because of these attitudes, many Americans are cash-heavy and fail to grow their money in a disciplined way.

According to the survey, less than one in four Americans regularly put aside a certain amount of income into long-term savings or investments. And only 14% of the people surveyed had a formal financial plan for their retirement.

The survey finds that about one in five Americans makes regular contributions to retirement accounts through their employer (21%) or saves for retirement outside of any employer plans (21%).

There is also a significant chunk of people that find it very difficult to keep up with bills and save for retirement at the same time (74%).

Add all of this up and BlackRock says it equals an “enormous gap in retirement savings” for Americans.

Baby boomers between the ages 55 to 65 said they want to have $45,500 in annual retirement income, but the nest eggs they have accumulated ($136,200 in average retirement savings) could provide $9,129 of estimated annual retirement income, leaving a potential annual gap of $36,371, according to the BlackRock CoRI Index 2025.

There are a rare few that are doing it right, the survey finds.

“There are a group of Americans – found across the survey population – who are breaking free of the attitudes and behaviors that can hinder effective saving and investing,” the report says.

A little over 2% of the Americans surveyed (or 96 out of nearly 4,000 respondents) meet the following qualifications: has savings and investments; has an emergency cash reserve of at least $10,000; has a formal financial plan for retirement; and keeps less than 25% of their assets in cash.

“They review their investments regularly and are most likely to use online sources and financial advisors to support their decision making,” the report says. “They are the most willing to take risks in order to achieve higher returns and the only group who actively ensure that their assets are diversified across multiple investment classes (stocks, bonds, etc.).”

BlackRock considers this group aspirational.

While this group’s income on average is only slightly higher than that of other Americans, the survey finds they have been able to accumulate considerably more overall wealth and retirement savings than any other group of Americans.

Nearly nine of 10 (86%) feel on track to reach their retirement goals. 

— Check out Saving for Retirement: The Rewards of Starting Young on ThinkAdvisor.