American Employees Are Scared of Daily Finances, Confident in Retirement

The human mind is a complicated thing.

Roughly 90% of American workers say they regularly experience financial anxiety, up from just 71% in 2022, according to a Betterment at Work survey. Yet despite worries about inflation, credit card debt and housing costs, 7 out of 10 say they’re at least somewhat confident they’ll be able to retire comfortably. It’s a contradiction that advisors said is all too common, but understanding it can help advisors navigate their clients’ long-term financial concerns and get them on a solid path toward retirement.

“Human psychology around money isn’t one-size-fits-all,” said Kevin Feig, founder of planning firm Walk You to Wealth. Some clients are deeply attached to their careers and struggle to imagine what retirement even looks like, he said, while others find it difficult to spend assets after decades of saving. “The key is to understand the blockers and emotions from a psychological perspective and then go from there,” Feig told Advisor Upside.

Are You Ready?

On the surface, retirement readiness appears to be improving. Participation in employer-sponsored retirement plans has reached an all-time high, with 91% of respondents saying they contribute to a 401(k). Still, anxiety remains widespread. More than half of American workers have considered delaying retirement due to insufficient savings, with baby boomers and women most affected. The survey also found:

• Gen Z, the oldest of whom are in their late 20s, are simultaneously the most confident in their retirement goals (88%) and the most financially anxious in their daily lives (73%).
• Meanwhile, Gen X is the most pessimistic regarding their savings. Only 61% believe they’ll have enough for retirement, citing struggles like limited time left to build assets, caregiving cost for their parents and college tuition payments for their children.

How Much Is Enough? That’s the million–dollar question. Roughly half of American workers believe they will need at least seven figures to retire comfortably, per the survey. While $1 million is a nice, round number, anchoring to a specific dollar target can be misleading, said Miller Hoffman, vice president at financial planning firm TradeWinds. “A certain dollar figure doesn’t guarantee a successful retirement,” he told Advisor Upside. Focusing instead on factors like insurance coverage, coordinated family planning, and sound tax and estate strategies often provides clients more peace of mind than hitting a number on an account statement.