One-in-five working Americans, or 21 percent, are struggling to save, according to a new Bankrate.com survey.
Bankrate’s survey found that just one-in-six working Americans (16 percent) were saving more than the 15 percent of earnings that most advisors recommended, while almost half (48 percent) were saving no more than 10 percent of their income.
Americans age 55 and older were more likely to save in excess of 10 percent of their earnings, but Millennials (ages 23-38) and Gen X (ages 39-53) were more likely than other generations to save less than the recommended minimum or nothing at all.
Respondents said they could not save because they had a lot of expenses (38 percent), they hadn’t gotten around to it (16 percent), their job didn’t pay enough (16 percent) or they were in debt (13 percent).
Greg McBride, chief financial analyst at Bankrate, recommended that Americans save money before they had a chance to spend it. He suggested setting up a payroll deduction that would go directly from a paycheck into a dedicated online savings account. McBride also recommended a workplace retirement plan or an IRA for retirement savings.
Ultimately, McBride said, if high monthly expenses are the reason Americans are not saving, they can either boost their income or cut their expenses. Either choice will require sacrifice and tough decisions, but in his professional opinion, financial security and peace of mind are well worth it.
Bankrate.com is a personal finance website owned by Bankrate, LLC, a consumer financial services company based in New York.