Concerns about retirement savings among Americans are escalating, according to recent surveys conducted by Goldman Sachs (NYSE:GS) and Bankrate. The surveys, published on Wednesday, found that over half of the respondents anticipate a delay in their retirement, with these apprehensions significantly influenced by age and the presence of a comprehensive financial plan.
Bankrate's survey, which involved 2,527 US adults, revealed that 56% felt behind on their retirement savings. A substantial 37% felt significantly behind. This unease was particularly pronounced among older generations such as Gen Xers and Baby Boomers, with 69% and 60% respectively feeling behind on their retirement savings.
Goldman Sachs introduced the term "financial vortex" to describe the struggle of managing multiple financial objectives with limited resources. This often leads to a lack of confidence in achieving retirement goals as funds that could have been set aside for retirement are frequently redirected towards other financial obligations. These include credit card debt, student loans, childcare costs, elder care expenses, and unforeseen financial emergencies.
The Goldman Sachs survey involved 5,261 US participants and underscored the positive impact of having a comprehensive financial plan on people's confidence in achieving their retirement goals. Among those who had a plan in place, 79% felt they were on track or ahead of their retirement schedule. This is a stark contrast to the mere 34% who felt confident without one. However, it was also noted that only 60% had at least a basic retirement savings plan.
The survey further highlighted concerns about financial literacy levels among respondents. Nearly half of them were self-managing their retirement savings but only 13% could correctly answer all the questions in a Financial Literacy Quiz. This emphasizes the need for increased awareness and education about personal finance management and planning for future financial security.
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