The report: Clocking out: US retirement report 2024
Source: YouGov
Why we picked this report: More than 4 million Americans will turn 65 this year and every year through 2027 – the so-called “silver tsunami”. Meanwhile, life expectancy in the US is nearing 80 and the promise of Social Security seems increasingly fragile. How will current generations of Americans fund their later years? The financial services industry can provide answers, but only if we know the lay of the land in detail.
Executive Summary
YouGov’s new study, “Clocking out: US retirement report 2024”, digs deep into the significant gaps and contradictions between Americans’ retirement aspirations and their financial realities.
According to the survey of 1,500 Americans conducted earlier this summer, 59% of Americans want to retire before 65, but only 40% believe they’ll be able to do so. Gen Z is most optimistic about early retirement, while Gen X and Millennials are most pessimistic about their retirement finances. Fully 45% of women are not confident about their financial security in retirement, compared to just 35% of men. Those who are confident about retirement are more likely to work with financial advisors and own diverse investment products. And early retirees (under 55) share distinct characteristics:
They’re more optimistic about their finances, more likely to invest in ETFs, and more willing to take risks in the stock market compared to older retirees.
The finds of the YouGov report highlights the need for increased financial education, personalized retirement strategies, and policy considerations to bridge the gap between retirement aspirations and realities across multiple demographic groups.
Key Takeaways
- 40% of Americans are not confident about their financial security when they retire, compared to 30% who feel confident.
- More than a third (35%) of Americans aren’t currently saving towards their retirement at all; 25% are saving up to 10% of their annual income.
- Education correlates with confidence: 49% of those with post-graduate degrees feel confident about their retirement, compared to only 25% of high school graduates.
- 64% of financially confident individuals have savings accounts, almost double (34%) of those who are not confident.
- Mid-age and late retirees (55 and older) are most likely not to have a budget for their spending.
- Many Americans are delaying retirement beyond the traditional offramp: Among those planning to retire in the next 12 months, almost half (45%) are already aged 65 or more.
What we liked about this report: Data. Lots of self-reported data from a good-sized sample of respondents.
What we didn’t: The report does not segment its respondents by anything other than generational cohort. Cuts by household income or even geography would have added significant value.
And some conclusions seem resoundingly obvious. An example: “Those who feel confident about their retirement finances are good savers and savvy investors.” (Of course, they would say that.)
Another: “There is a direct correlation between wealth and assets and whether Americans feel financially confident about their retirement.”
Financial Confidence and Retirement Planning: Data Points
Social Security remains the lynchpin in most American’s retirement plans: Almost two-thirds (62%) say they need it to be the primary source of income in retirement. Only a third say their own savings will fund most of their needs. And more than a quarter say they will probably need to continue working part-time to support themselves in retirement.
The new generation gaps. Ah, youth. Gen Z are most likely to say they would like to retire before 65 (almost seven in 10 say they want to), and almost 50% believe they will be able to do so.
But rude reality is setting in for the Millennials: Almost the same percentage as Gen Z (63%) would like to retire early, but just 30% are confident they will.
Meanwhile, Baby Boomers (many of whom are already retired) are sitting pretty: A solid 42% report they feel confident in their retirement plans.
America is not a nation of savers. “Nothing, nada, zilch” – that’s what more than a third (35%) of survey respondents say they are currently saving toward their retirement. Another 21% admit they don’t know how much they’re saving.
Meanwhile, early retirees are looking to investments in stocks and crypto to get them across the line. Either risktakers are more temperamentally interested in early retirement – or those focused on early retirement are willing to take more risks. Either way:
- Almost 60% of early retirees (57%) say that “Cryptocurrencies are the future of online financial transactions.”
- 54% say “I like to take risks in the stock market,” and
- 50% admit “I often move money around to different accounts to trick myself into spending less.”