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Data & Research March 2, 2018
Non-Mortgage Debt Derails Retirement Savings for Many
Among those who said they would like to save more, 56% said retirement was a top reason; however, LIMRA found that debt is a major obstacle preventing many people from saving as much as they would like.
Reported by Lee Barney
Fifty-four percent of Americans want to save more money, the LIMRA Secure Retirement Institute found in a survey. Other financial priorities are to push down debt, create a long-term financial plan and build better spending habits.
Among those who said they would like to save more, 56% said retirement was a top reason. However, LIMRA found that debt is a major obstacle preventing many people from saving.
According to the Federal Reserve Bank, U.S. household consumer debt has reached $13 trillion. The LIMRA survey found that 71% of American workers hold some type of non-mortgage debt, such as a car loan, student loan or credit card debt. Sixty-percent said that this type of debt was negatively impacting their ability to save for retirement.
Among those with non-mortgage debt, only 31% are saving for retirement outside of their workplace retirement plan, whereas 69% of those who do not carry any non-mortgage debt are saving for retirement outside of their workplace retirement plan. Among Millennials, only 23% are saving for retirement outside of the workplace retirement plan. LIMRA believes this could be because many Millennials carry large student loans and credit card debt.
Despite this rather dismal outlook with regards to retirement savings, 50% of those surveyed said they felt financially secure, 60% said they were optimistic about their financial future, and 50% said they are confident they will be able to live the retirement lifestyle they aim for.