Nearly half of working age Americans aren't currently saving for retirement, according to new data from the financial services firm Edward Jones.
Nearly half of working age Americans aren’t currently saving for retirement, according to new data from the financial services firm Edward Jones.
The firm last month conducted a study of more than 1,000 non-retired adults, finding that 45% have no active retirement saving strategy. Of those who aren’t saving, 1 in 10 say they never plan to save for retirement. Just more than one-third of the non-savers (36%) say they plan to start saving at some point in the future.
Scott Thoma, principal and investment strategist for Edward James, said that “I’ll start later” mindset is insufficient.
“When it comes to retirement savings, there’s a big difference between planning to save and actually doing so,” Thoma said, in a press release announcing the findings. “While intentions to save for retirement are legitimate, individuals tend to satisfy more immediate, short-term spending goals and push off their long-term saving goals.”
Thoma said such delays can prove “incredibly detrimental,” since it means savers shorten the time horizon in which their savings can grow.
The survey found most young people intend to start saving for retirement in their 30s, but only 64% of respondents ages 35-44 succeeded in doing so.
Family size was also a significant factor. In single-person households, only 39% of respondents said they aren’t saving for retirement. However, in households with 3 or more people, 51% said they haven’t started saving.
Thoma said parents need to start saving earlier in order to account for the extra costs that accompany parenthood, not the least of which is college tuition.
“We cannot emphasize enough the importance of saving for retirement early and often,” he said. “It leads to higher future income in retirement, with less stress and uncertainty working to achieve those goals.”