Facing Delayed Retirement, Many Americans Wish They Had Started Saving Sooner

Two separate research reports released by retirement solutions providers this week share a theme in retirement for Americans: Many people wish they had started saving sooner, and a majority of those in or near retirement (68%) say they will need to delay retirement because they do not have enough saved.

One report, by Voya Financial Inc., focused on how Americans saved and how they wish they had saved in the past. Another, by annuity provider F&G Annuities Life & Inc., asked about people’s retirement plans and trajectories.

Do-Over

More than half of Americans began saving for retirement between the ages of 18 and 34, with an average starting age of 28, but 64% of Americans wish they had started saving before turning 25, according to Voya’s survey released on Thursday.

On average, Americans reported wishing they had started saving for retirement at age 23, five years earlier than the average starting age. The survey also highlighted generational differences in retirement savings behavior.

Generation Z, on average, began saving at about 20 years of age, by far the youngest of the generations considered. Millennials started at an average age of 24 but wish they had begun at 23. By contrast, Generation X and Baby Boomers started saving later, at 30 and 32 years old, respectively, though members of those generations wish they had started at 23 and 24, respectively.

The findings underscore a common sentiment across all generations: regret that they did not start saving for retirement sooner, Voya found. Many are attempting to make up for lost time, according to Voya’s retirement plan participant data, which show that in the first quarter of 2024, the majority of those who changed their savings rate increased it. This includes 78% of Gen Z, 75% of Millennials, 75% of Gen X and 78% of Baby Boomers.

“Deciding to save early and often in an employer-sponsored 401(k) or other retirement account is within the control of every employee who has access—and this can be an important factor in creating an effective plan that leads to financial security in the future,” Kerry Sette, vice president, consumer insights and research at Voya, said in a statement. “As many employees face competing financial priorities, it’s important to remember that saving in a tax-advantaged retirement account can allow earnings to compound over time, which could be increasingly powerful for employees with a longer investment time horizon.”

Do More

In a separate survey commissioned by F&G, more than half of pre-retirees older than 50 and retirees themselves are considering delaying or coming out of retirement. Despite the S&P 500 being up more than 20% over the past year and inflation moderating since 2023, anxiety persists: 68% are considering delaying retirement, up from 64% last year.

Gen X respondents appear particularly concerned, F&G reported, with 71% considering or having already delayed their retirement plans, an increase from 65% last year. Inflation is a major factor influencing these decisions, cited by 49% of pre-retirees older than 50 and 44% of retirees considering rejoining the workforce.

Gen X respondents cited worries about not having enough money for retirement (49%), inflation (47%), wanting more financial options and a larger safety net (42%) and worries about a recession or stock market downturn (31%).

“This remains a challenging macroeconomic environment to navigate for those close to or in retirement,” said Chris Blunt, CEO of F&G. “As our survey shows, Americans are still reconsidering what retirement means to them, and that may look different from previous generations. We believe taking a proactive approach in financial planning can help mitigate some of the economic risks, allowing people to focus on their own personalized roadmap of how and when to retire.”

Voya’s survey was conducted on May 15 and 16 among 1,005 U.S. adults aged 18 and older.  F&G’s survey was fielded from May 1 through 16 among 2,048 U.S. adults. Respondents were Americans aged 50 and older who were financial decision-makers with at least $100,000 in financial products and savings.