Almost 4 in 5 Americans are concerned that inflation is eating away at their financial security. One big result of this? Retirement expectations are getting altered for some adults.
Those are the findings of Prudential Financial’s Pulse recent survey.
Nearly half (49%) of millennials don’t feel they’ll ever be able to retire and 64% are skeptical of their ability to build personal wealth, according to the findings.
Americans are seeing the “glass half empty when it comes to their financial futures,” Rob Falzon, vice chair of Prudential Financial, told Yahoo Money. “Despite financial and work gains over the last two years, they remain in a precarious financial position and inflation as well as a looming economic downturn are overshadowing their confidence in their ability to achieve long-term security.”
Another recent report backs up this doom-and-gloom outlook. Almost one quarter of workers said they expect to retire later than planned, according to a new survey from Schwab Retirement Plan Services.
Sadly, the annual nationwide survey of 1,000 401(k) plan participants between the ages of 21 and 70 found that one third of plan participants do not know how long their savings are likely to last in retirement, and the two-thirds who estimated said they expect their retirement savings to last 23 years on average.
Guessing is not a plan for success.
“These results don’t surprise me,” Cal Halvorsen, assistant professor at the Boston College of Social Work, an affiliate of the Center on Aging and Work, told Yahoo Money. “From my own experiences with graduate students in their 20s, most lack a clear understanding of retirement savings strategies and also think that it is a problem to deal with in the future. As a result, many don’t realize the importance of taking the money on the table at their first jobs (if their job even offers a 401(k) or similar with a match, which many don’t).”
But it’s a larger problem when it comes to adequately saving for retirement, so working longer is a choice not a necessity.
“We have a system that provides many of these benefits to full-time workers in larger organizations that can afford to provide them. So—part-time workers, even those in multiple jobs, as well as self-employed workers, struggle to save for retirement (and afford health insurance),” Halvorsen said. “As a result, many are looking at a financially difficult retirement.”
In fact, only about half of workers with 401(k) plans said they feel confident they’ll reach their retirement savings goals, according to the Schwab survey. The amount they believe they need to have saved for retirement: an average of $1.7 million.
And workers foresee their 401(k) to be their primary financial resource in retirement, providing more than a third of their income (37%), followed by Social Security (17% of income).
The current economic footing isn’t helping. Most troubling is that workers are saving less (33%) and spending more in general (30%), according to the Schwab report. They’re saving less for emergencies (20%), investing less outside their 401(k)s (18%) and contributing less to their 401(k)s (15%).
Talk about a recipe for disaster.
Kerry is a Senior Columnist and Senior Reporter at Yahoo Money. Follow her on Twitter @kerryhannon