As regular readers know, we’ve been highlighting results from our annual Wells Fargo Retirement Study for a couple weeks now. This is the third in a series of four posts—here are part one and part two.
As I’ve mentioned, we conducted our 2010 Retirement Study in an effort to better understand the impact that the current economic environment has had on middle class Americans ranging in age from their mid-20s to their late 60s.
Americans participating in our annual Wells Fargo Retirement Fitness Study were asked about the impact of the recession on their financial management and retirement expectations. Here’s what they told us:
- 71% are actively working to reduce debt.
- 65% are not very confident or not at all confident that the stock market is the right place for investment gains for their savings.
- 55% have other financial priorities and don’t have extra money to save.
- One-third are worried about a job loss in their household in the coming year (40-somethings [43%] and 50-somethings [42%] are most concerned about job loss).
- People making $75,000 to $100,000 a year have saved more than those making $100,000 and up, with a median of $99,000 in total investable assets, vs. $59,000 saved by those making $100,000 and up.
It’s clear that many of the people who responded are still feeling significant impacts from the recession and feel it is affecting their ability to save for retirement. Nearly three-quarters (71%) are trying to reduce debt, which may mean more money is going to debt-reduction than savings.
While debt reduction is critical to sound financial management, saving for retirement is also important. With 72% of respondents anticipating they’ll need to work at least a portion of their retirement years, setting aside money now, no matter how small the amount, can potentially result in a better retirement outcome later. The earlier you are able to save, the better the chance of meeting your retirement goals.
If you find yourself struggling to pay down debt and save for retirement at the same time, the practical steps provided in our article Owe Less and Save More may prove valuable to you. Please take a look!