More Americans Struggle to Save for Retirement, Living Paycheck to paycheck
WASHINGTON – A growing number of Americans are finding retirement savings increasingly out of reach as more live paycheck to paycheck, according to recent findings. A Natixis study from last year revealed that many Americans need a “miracle” to retire with $150,000 in assets, highlighting the deepening financial strain on households.
The struggle to build a secure retirement is a widespread issue, impacting multiple generations. While closing the retirement funding gap solely through savings can be difficult, experts suggest several strategies to improve financial futures. However,access to these options isn’t worldwide,leaving a significant portion of the workforce vulnerable.
Goldman Sachs noted that even small, consistent savings can make a difference.Setting aside $500 annually from ages 1 to 20, for exmaple, could increase retirement savings by 14%. Adding private market investments to a portfolio could also possibly boost savings by the same percentage through higher returns. These strategies could become more accessible under a potential Trump administration plan to open up 401(k) plans to private equity,cryptocurrencies,and other option investments.
Employers can also play a crucial role by offering benefits like emergency savings accounts, helping workers avoid dipping into their 401(k)s for unexpected expenses like medical bills.
Despite these potential solutions, roughly half of all U.S. private-sector workers lack access to employer-sponsored retirement plans, according to an analysis from the Pew Charitable Trusts earlier this year. The Pew survey also found that workers without access to these plans often struggle to build wealth.
The increasing financial precarity underscores a growing challenge for American workers, raising concerns about the future of retirement security for a large segment of the population.
Aimee Picchi is the associate managing editor for CBS moneywatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.
