Demographic Insights in Retirement
Two new reports from Voya Financial and F&G Annuities & Life highlight a common theme among Americans: many regret not starting their retirement savings earlier. A significant number of those in or near retirement now face the need to delay their retirement due to insufficient savings.
Voya Financial Report
Voya Financial's report reveals insights into how Americans have saved for retirement and their regrets about not starting earlier:
- Average Starting Age: More than half of Americans began saving for retirement between ages 18 and 34, with an average starting age of 28.
- Regrets: 64% of Americans wish they had started saving before turning 25. On average, they reported wishing they had started at age 23.
- Generational Differences:
- Gen Z: Started at age 20.
- Millennials: Started at age 24 but wish they had begun at 23.
- Gen X and Baby Boomers: Started at ages 30 and 32, respectively, but wish they had started at 23 and 24.
- Increased Savings Rates: In the first quarter of 2024, most who changed their savings rate increased it, including 78% of Gen Z, 75% of Millennials, 75% of Gen X, and 78% of Baby Boomers.
Kerry Sette, vice president of consumer insights and research at Voya, emphasizes the importance of starting early and saving consistently in employer-sponsored retirement accounts.
F&G Annuities & Life Report
F&G's survey highlights the ongoing anxiety among pre-retirees and retirees, with many considering delaying retirement:
- Delayed Retirement: 68% of respondents are considering delaying retirement, up from 64% last year.
- Gen X Concerns: 71% are considering or have already delayed retirement plans, up from 65% last year.
- Factors Influencing Delays:
- Inflation: Cited by 49% of pre-retirees over 50 and 44% of retirees.
- Financial Insecurity: Gen X respondents worry about not having enough money for retirement (49%), inflation (47%), wanting more financial options and a larger safety net (42%), and concerns about a recession or stock market downturn (31%).
Chris Blunt, CEO of F&G, notes the challenging macroeconomic environment and the need for proactive financial planning to mitigate economic risks.
Both reports underline the importance of starting retirement savings early and consistently. They also highlight the need for better financial planning to address economic uncertainties and ensure a secure retirement.
