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It’s not an illusion — that nest egg really is smaller than it used to be.
A new survey from BlackRock of US retirement plan participants found that in the past two years more Americans, especially those in younger generations, feel like their retirement savings are “off track.”
Work, Work, Work
Retirement used to be a time when Americans could look forward to cashing in on more than four decades of hard work, offering the freedom to play golf, paint bowls of fruit, or pursue other passion projects. But the trek toward post-work life has become an anxious journey, one that many feel unprepared for and that doesn’t have a clear, attainable destination.
Today, just over half of Americans say they’re on track to retire with the lifestyle they desire, compared to nearly 70% two years ago, BlackRock’s survey found. BlackRock noted several contributing factors, including multiple years of high inflation, recession fears, and volatile financial markets. The result is many Americans coming to grips with having to work longer than previously planned:
- While some Americans continue to work for a sense of purpose, others just need the paycheck. The average age of retirement in the US is around 64 years old, but nearly 30% of those surveyed said they plan on pushing back their retirement.
- And these fears are most abundant among the multitasking, tech-dependent citizens of Gen Z (the oldest of whom are in their mid-20s). BlackRock found that 56% of all workplace savers aren’t confident managing investments themselves, but that number rose to 71% for Gen Z. Average college loan debt has hovered around $30,000 for the past decade, and with a swat-down from the Supreme Court on forgiveness, younger folks will be navigating the restart of payments and how they intend to save for their futures.
What Did You Learn in School Today? Retirement and general economic apprehensions can also be attributed to a lack of financial literacy, a subject historically not covered well in American schools. However, the push for personal finance education has been growing. Just last year, six states adopted policies that will have schools teach students about money, and as of today, 22 states require a semester-long personal finance course for graduation, according to the nonprofit Next Gen Personal Finance. For the non-teens out there, well, you’re still on your own.