Wells Fargo’s fifth-annual Middle Class Retirement Survey, released Wednesday, continues to reveal horrific numbers, with the bank describing ‘saving for retirement’ as a formidable challenge for middle-class Americans.
More than a third of middle-class Americans are not currently contributing anything to a 401(k), an IRA or other retirement savings vehicle.
“Nearly a third (31%) of all respondents say they will not have enough money to “survive” on in retirement,” the bank’s survey found. “This increases to nearly half (48%) of middle-class Americans in their 50s.” Nineteen percent of all respondents have no retirement savings.
For respondents, more troubling are those between the ages of 30 and 49 years, where a whopping 59 percent say they “plan to save later to make up retirement savings” and 27 percent are not currently contributing savings to a retirement plan or account.
Putting off saving now with the expectation of making up for it later in life just doesn’t work. As the bank notes:
“Saving for retirement isn’t easy. It requires sacrifice, and it’s not something people can push off and hope to achieve later in life. If people in their 20s, 30s or 40s aren’t saving today, they are losing the benefit of time compounding the value of their money. That growth can’t be made up later, so people have to commit early in life to make savings a regular discipline year after year – it is the only way most people will achieve their financial goals to carry them through retirement,” said Joe Ready, director of Institutional Retirement and Trust.
While a majority of middle-class Americans say that they are not sacrificing a lot to save for retirement, 72% of all middle-class Americans say they should have started saving earlier for retirement, up from 65% in 2013.
The findings mirror the last installment in the Wells Fargo series, when more than a third of respondents said they expected to work until at least 80 years in order to have enough to retire on, according to the L.A. Times.
