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.

First « 1 2 » Next