Americans Misjudge Savings Needed for Retirement

Americans have some wrong ideas about how much they need to save for retirement, according to a survey conducted by Morning Consult and released by the Financial Services Roundtable (FSR).

About one-third of respondents said they think they should be saving less than 10% for retirement, or aren’t sure how much of their paychecks should be devoted to retirement savings. About two-thirds surveyed believe they will need less than $1 million in today’s dollars in order to retire, or aren’t sure how much they will need. Only one-third believe they will need $1 million or more to support themselves in retirement.

FSR notes that experts recommend workers aim to save at least 10% of their income toward retirement, and most Americans may need much more than $1 million in retirement as lifespans—and time spent in retirement—lasts longer.

However, the survey found Americans get a better understanding of their retirement savings needs as they age. Fifty-six percent of 18- to 29-year-olds think they should save more than 10% for retirement, 69% of those 45 to 64 know they should save more than 10%, and 79% of those older than 65 know they should save more than 10% for retirement. 

NEXT: Americans value workplace retirement benefits

The FSR poll shows workers highly value retirement benefits in the workplace, rating them as one of the two most important benefits employers can offer, along with health care, at 94% and 95%, respectively.

When it comes to helping employees save for retirement, 63% of workers think employers should match between 5% and 10% of an employee’s pay. Only 5% of workers said they would likely opt-out if they were automatically enrolled in an employer retirement plan. FSR says this highlights the significant influence employers can wield over their employees’ opportunities to secure their financial future.

The poll surveyed more than 2,000 registered voters nationwide, 87% of whom said schools should teach students more about how to save and spend money wisely.

Nearly 68% said 2016 presidential candidates have not been talking enough about ensuring Americans have a secure retirement.