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April 04, 2023 at 02:04 PM
What You Need to Know
- Working Americans 45 and older on average estimated that it will take $1.1 million to retire comfortably; however, only 21% expect to reach $1 million.
- Over half of older workers surveyed expressed concern that financial stress will hurt their overall health.
- Thirty percent of older workers and 22% of working millennials reported that their financial advisor was the most helpful source of financial advice in 2022.
American workers are worried about their retirement savings and losing sleep as a result, according to the Schroders 2023 U.S. Retirement Survey, released Tuesday.
It’s no wonder they’re concerned. Working Americans 45 and older on average estimated that it will take $1.1 million to retire comfortably, but only 21% expect to reach the $1 million mark, down from 24% in 2022.
Many won’t get close. Fifty-nine percent said they expect to have less than $500,000 saved at retirement, including 34% who said they will have less than $250,000.
Millennial workers are in the same boat. Respondents in this age group estimated it will take about $1.3 million to retire comfortably. However, 49% said they will have less than $500,000 saved, including 27% with less than $250,000. Only 29% expect to hit the $1 million mark.
As for non-retired Americans who are getting close to leaving the workforce, just 24% said they have enough money to retire, up from 22% in 2022.
“There are profound gaps between what American workers say they need for a comfortable retirement and what they expect to have,” Deb Boyden, head of U.S. defined contribution at Schroders, said in a statement. “This could be from a lack of planning, or for many it might just be too hard to save and invest enough to reach their retirement goals.”
Boyden said everyone from employers to advisors to investment managers has to strive to make it easier for American workers to reach retirement security.
8 Acre Perspective conducted the survey from Feb. 13 to March 3 among 2,000 U.S. investors nationwide ages 27 to 79, including respondents between ages 27 and 44 for the first time. Working Americans in the sample have a median household income of $75,000.
Time Spent Worrying
Sixty-four percent of working millennials and 53% of older workers in the survey expressed concern that financial stress will hurt their overall health.
Majorities of both groups said the 2022 stock market greatly heightened their anxiety. Forty-nine percent of millennials and 40% of older workers said they have lost sleep worrying about their financial situation.
Among Americans in work, 85% of millennials said they worry about money every day, and those who do so spend on average of 1.9 hours per day or about 13 hours a week worrying. Schroders said this amounts to approximately 28 full days a year stewing about money.
Sixty-nine percent of workers ages 45 and up said they worry each day about money, and worriers spend on average 1.6 hours or about 11 hours each week ruminating. This amounts to approximately 24 days a year worrying about money.
Allocating Retirement Assets for Safety
Half of all workers with a workplace retirement plan, such as a 401(k), reported that their plan’s 2022 performance caused them anxiety.
