A series of bad headlines could be taking its toll on retirement savers.

For the first time in several years, retirement confidence fell in BlackRock’s “Read on Retirement” survey. After peaking at 68% last year, the number of respondents saying they are on track for retirement declined to 63% in this year’s survey. A total of 42% of workplace savers in the survey say the pandemic and its aftereffects have set them back in preparing for retirement.

The top two reasons savers don’t feel on track were that, first, they were not earning enough to save, a problem named by 23% of participants, and second, they were set back by the high cost of living, named by 17%.

Plan sponsors are also concerned. The average proportion of employees estimated to be on track for retirement declined from 63% in 2021 to 58% this year. Most plan sponsors, 69%, are worried about inflation eroding their participants’ nest eggs.

Going It Alone
Independent savers were even more pessimistic than their peers in workplace plans. About half of the independent savers in the survey, 51%, said they were on track to retire. More than a third of these savers said more access to the tools within retirement plans could help them feel more on track.

In fact, more than two-thirds of the independent savers, 68%, said they would use a workplace savings plan if it was offered to them, with employer matching being the biggest factor that would make them more likely to save in a workplace plan.

Independent savers are more likely to favor defensive investments over growth than their peers in workplace plans—nearly half of independent savers are holding at least some of their retirement savings in cash.

Much Depends On Age
The younger a person is, the more likely they are to save less for retirement when faced with other big-ticket goals. So while 42% of Gen Xers would slow down their retirement saving for something like a home purchase, 72% of Gen Z and 60% of millennials said the same.

Retirement assumptions also vary widely among the generations. For example, 36% of Gen Z respondents thought they would need less than $250,000 to retire comfortably. Nearly half of the baby boomers in the survey thought they would need somewhere between $1 million and $3 million.

Generation Z’s average savings rate, 14%, was similar to those of other generations in the survey. Gen Z expects to retire at an average age of 63.6—while the average retirement age for boomers is now 65.9.

Men Vs. Women
Men are more likely than women to choose investments using their own research; 72% of them said they did while only 58% of women said the same. Sixty-three percent of women in the survey were likely to favor professional advice while only 49% of men were.

Women are also more concerned about retirement income than men. Sixty-five percent of the women in the survey said they are worried about having to generate their own retirement income while only 55% of men were.

Women also express less certainty about their environment. Forty-four percent of them said they are more likely to feel unsure about how much retirement income they need while only 30% of men said the same. And women are more likely to express concern about outliving their retirement savings, something 68% of them said while only 60% of men did.

Women are less likely to be on track for retirement and more likely to feel as if they should be saving at a higher rate.

The “Read on Retirement” survey, formerly known as the “DC Pulse Survey,” was fielded between March 25 and April 30, 2022, among 305 plan sponsors, 1,308 workplace savers, 1,300 individual savers and 300 retirees.