Need to Save More for Retirement? You're Not Alone, Says Study

For most workers, retiring comfortably is the end goal. Unfortunately, 57% of all workers are unsure they can comfortably move into retirement, according to Bankrate’s latest Retirement Savings Survey. Some of that doubt may stem from uncertainty about when Social Security will run out of money. However, interesting generational differences emerged in the study. Younger workers tend to be more optimistic, likely because they have more time to save. In some cases, they are taking action; Gen Z workers are the most likely cohort to say they are saving "much more" or "slightly more" than last year. 

How about you? Are you taking action? There are steps you can take now, no matter your age, to ensure a financially sound retirement.

Survey's key findings

• More than half, or 57% of American workers, feel behind where they should be on their retirement savings. 
• More than 30% feel significantly behind. 
• Over 60% of workers are contributing more or about the same amount to their retirement savings than they did a year ago.
• But 37% are contributing less than they were a year ago.  
• Nearly half (48%) of American workers with a retirement goal don’t think they’ll likely be able to save that much.

Retirement savings by age

Respondents to the survey were asked if they felt they were ahead of where they should be, behind, or right on track. Amazingly, only 15% of all workers feel ahead of where they should be. 

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Older workers tend to think they’re behind where they should be on their retirement savings, with 68% of Gen X workers (ages 44-59) and 66% of baby boomer workers (ages 60-78) feeling behind.  Millennials and Gen Z workers are a little more optimistic, with 53% of Millennials and 40% of Gen Z workers feeling the same way. 

Retirement savings by income and education

Workers with at least some college, or those with a two-year college degree, are the likeliest to feel behind on their retirement savings.

• No high school/high school graduate: 59%
• Some college/two-year degree: 61%
• Four-year degree: 53%
• Post-graduate degree: 48%

Lower-income workers feel the most behind on their retirement savings compared to other income levels.

• Under $50,000 per year: 64%
• $50,000-$79,999 per year: 58%
• $80,000-$99,9999 per year: 55%
• $100,000 per year or more: 50%

When asked if they were contributing more or less to their retirement savings than last year, Gen Z workers were the generation contributing more to their retirement savings than a year ago.

• Gen Z workers: 30%
• Millennial workers: 27%
• Gen X workers: 29%
• Baby boomer workers: 17%

In contrast, baby boomers, who are closest to retirement age, are the likeliest generation to contribute less to retirement than they did a year ago.

• Gen Z workers: 14%
• Millennial workers: 17%
• Gen X workers: 15%
• Baby boomer workers: 21%

If you feel behind on your retirement savings, it’s time to get back on track, regardless of your age.

Increase your retirement contributions

One way is to increase your retirement contributions now and let the power of time and compound interest do the work. 

For example, let's say you’re 40 years old, living on a $65,000 salary, and you have no retirement savings. If you saved only 15% of your gross income for retirement, you’d be putting aside $812.50 per month into a 401(k) or IRA. At the end of 25 years, you’d be a millionaire (a couple of times over).  

The Bankrate survey shows that at least 1 in 4 workers, or 27%, contribute more, and 36% contribute about the same amount to their retirement savings compared to a year ago. Only 16% contribute less, and 21% aren’t contributing anything. However, employer-sponsored plans have higher contribution limits in 2024, which can help you save more now. For 2024, you can invest up to $23,000 into your 401(k) and, if you’re 50 or older, an extra $7,500 as a catch-up contribution.

If you want a sense of how your retirement savings stack up against those of peers your age, read The Average 401(k) Balance by Age and The Average IRA Balance by Age. 

Increase your income

You are your best advocate when it comes to increasing your income. Asking the boss for a raise can be intimidating, but if you’ve kept track of your achievements throughout the year, you may be surprised how well negotiations for a promotion or pay raise will go. And, when you get that raise (which we know you will), put it toward your retirement savings. 

You could also get a side hustle, like driving for Uber, walking dogs, creating a podcast, or one of these other seven online side hustles. Use your talents to earn cash. Then, consider setting up a solo 410(k), where you contribute both as the employer and employee. If you earn enough, you can reach the combined maximum contribution limit of $69,000 in 2024, boosting your savings.

Pay off high-interest debt

The most recent data from the Federal Reserve reports that credit card debt in the U.S. reached $1.14 trillion (that’s a trillion with a “t”) in 2024. Credit card balances increased by $27 billion, with an average balance in 2023 of just over $6,500 per user, according to Experian. 

With interest rates averaging about 20.70%, according to Bankrate, carrying a high balance means losing money each month in interest charges and fees that could go toward your retirement. So, you may want to consider paying down your high-interest credit card balances. Or, better yet, make a plan to pay them off. 

Think about it this way: If you have a credit card balance of $5,000 at a 17% interest rate, and you pay only the 2% required minimum payment on the balance owed each month, it will take you over 30 years to pay off the $5,000 (if you don’t charge any new purchases to the card), and you will end up paying over $10,000 in interest alone, according to TransUnion. 

How much do you need to retire?

Who knows? For many Americans, their target retirement savings number is a mystery; 23% don’t know how much they’ll need in retirement. “While I appreciate candor, it is quite suboptimal that almost one in four American workers say they don’t know how much it will take to fund their retirement and live comfortably. They should elevate this task on the financial to-do list,” says Bankrate Senior Economic Analyst Mark Hamrick. 

A million? “Among the first necessary or helpful steps along the journey toward success is to identify a goal and to have a plan. To do anything else is the financial equivalent of driving without a seatbelt, or worse, with blinders on.” This is the breakdown by age of workers who feel they’ll need a million dollars to retire comfortably: 

• Gen Z workers: 31%
• Millennial workers: 40%
• Gen X workers: 37%
• Baby boomer workers: 22%

Bottom line

If you’re late to the party and feel you’re not even close to having enough in the bank to retire, working with a trusted financial advisor may help get your finances on track. They can lay out your options and devise a plan so you can comfortably retire. But if you’re young and working or retirement is a far way off, take steps now to secure your future. After all, you only really retire once, so make the best of it. 

Related Content

• A 10-Year Checklist for Retirement Planning
• When Will Social Security Run Out of Money? And Medicare?
• How to Have a Happy Retirement
• Rolling over a 401(k) into an IRA
• Four Changes Coming to IRAs in 2025