Over half of Americans have not even started saving for their retirement, as a crisis looms

Amid reports that the average American will need to save $1.9m in order to retire comfortably, the finance and investment experts at FOREX.com delved deeper into the current retirement pot attitudes across the US. To do so, the experts conducted a comprehensive study of 3,000 Americans to ultimately uncover how much each state has on average in their investment pot, what sources Americans are relying on for their retirement savings, and how comfortable they currently feel with their current financial pot.

Key findings:

• Over half (55.70%) of Americans have not started saving for their retirement, despite over a third (33%) believing they would need between $100,001 – $500,000 to retire comfortably in the future.
• Over two-thirds of Americans (68.8%) are not at all satisfied with their current retirement savings pot, with less than 1 in 20 feeling satisfied (4.9%).
• West Virginia is the state currently most prepared for retirement – with 14.8% of respondents sitting between $100,001 – $500,000 in savings, and 12.5% of them also stating they are “very satisfied” with their current retirement pot.
• Real estate and stock market investments are emerging as the most common sources Americans rely on for their retirement savings, with over a third relying on these sources (35%).
• Matt Weller, head of Market Research at FOREX.com provides his expert tips on how to better save for retirement in 2024.

Over half of Americans have not started saving

Q1: How much do you currently have in your retirement savings pot?

Please find the full survey dataset here. 

Data gathered on behalf of FOREX.com can reveal that over half of Americans have not started saving for retirement yet (55.70%), with one in every six also revealing that they have less than $10,000 in their savings accounts (15.8%). This is despite the fact that a third (33%) of them believe they need between $100,001 – $500,000 to achieve a sense of financial security when they retire, and over a quarter (26.10%) believe they need between $500,001 and $1,000,000.

When it comes to state-by-state analysis – those in Montana are most prepared for their retirement, with over a fifth of those surveyed currently sitting on $100,001 – $500,000 in retirement savings. This is closely followed by West Virginia, with 14.8% of respondents sitting on the same value.

Over two-thirds of Americans are not at all satisfied with their current pot

Q2: On a scale of 1 to 5, with 1 being the lowest and 5 being the highest, how satisfied are you with the current size of your retirement savings?

Please find the full survey dataset here. Please find further information in the methodology.

The research can further reveal that over two-thirds of Americans are not at all satisfied with the current size of their retirement savings pot (68.80%), with a further 15.5% reportedly feeling slightly satisfied.

In comparison, less than one in every 100 (0.80%) report feeling very satisfied with their retirement savings, suggesting the majority of Americans do not feel financially prepared.

When it comes to state-by-state analysis – West Virginians are currently feeling the most satisfied with their retirement savings, with 12.5% of respondents saying so. However, on the other end of the spectrum, those surveyed in Alaska, Idaho, and Wyoming all admitted to feeling not at all satisfied with their current pot.

Real estate and stock market investments are emerging as the most popular sources

Q2: What sources do you rely on for your retirement savings?

Please find the full survey dataset here. Please find further information in the methodology.

Interestingly, over a third (35%) of Americans are choosing to rely on real estate investments (18%) or stock investments (17%) as their source. In a world where financial landscapes evolve, the combination of real estate and stock market investments may stand out as a formidable strategy for building and safeguarding wealth.

With 30% of Americans surveyed feeling somewhat uncertain in their confidence in managing the risks associated with retirement savings, exploring both avenues offers a compelling path toward financial security and prosperity.

How do I save for my retirement?

Matt Weller, head of Market Research at FOREX.com, offers his insight into how to better save for retirement in 2024:

Many of the best retirement savings tips in 2024 are the same as always:

Start Early: The power of compounding interest is immense. Start saving as early as possible, even if the amount is small.

Utilize Tax-Advantaged Retirement Accounts: Take full advantage of 401(k)s, IRAs, and other retirement accounts, especially if your employer offers matching contributions.

Keep Costs Low: Pay attention to the fees associated with your investments and retirement accounts. Lower fees mean more of your money is working for you.

Automate Savings: Set up automatic transfers to your retirement accounts. This makes saving effortless and helps avoid the temptation to spend.

Increase Savings Rate Over Time: As your income grows, gradually increase the amount you save.

Stay Informed, But Avoid Knee-Jerk Reactions: Stay updated on financial news, but avoid making impulsive decisions based on short-term market fluctuations.

Featured image via yanishevskaanna – Envato Elements