Majority of Younger Americans are Not Saving

The ING Direct survey also found that a majority of Americans (89%) agree that saving for retirement should start with your first job and continue throughout your working life. More than a third (34%) of those who deduct a percentage of their paycheck and just under half (47%) of those who give a fixed amount, don’t know how much they currently contribute. And a third of Americans (33%) think it’s okay to defer retirement savings to pay for another need.

Americans of all ages and sexes are neglecting retirement planning, but there are clear differences between older and younger generations, ING found. And while women are often making financial and purchasing decisions for their households, the survey found they are not taking the same care as they plan for their own golden years.

ING’s data found that most younger Americans are not heeding the call to save for retirement. Less than a third (32%) of those in their 20’s are currently contributing to a retirement plan. Student loans are clearly one of the contributing factors to a lack of a nest egg; one in five (21%) Americans in their 20’s say paying off student loans is a higher priority than retirement. Less than half have checked their credit score (43%) or read about financial planning (42%), and less than one in five (19%) have an emergency fund.

Conversely, older Americans are starting to wisen up, says ING. About half of those 40 or older have used a 401(k) to save for retirement. Nearly half (46%) of those in their 50's think they are saving enough for retirement. Less than half of those 50-59 have created a will (48%) or purchased term life insurance (49%). Almost all (91%) of those 50-59 believe saving for retirement should start with your first job and continue throughout your working life to ensure a secure retirement. More than half (54%) of those 50-59 disagree that just 5% yearly annual salary contribution to a retirement plan will provide a secure retirement.

As for gender differences, women aren't preparing for retirement as well as men are, but they are more likely to admit their mistakes. The survey revealed that women are more likely than men to say that they wish they had started saving for retirement earlier. And of those women, the majority (58%) wish they had started saving in their 20's.

National phone surveys were conducted in August and September 2011 among 2,000 adults over the age of 18.