Savings

Financial priority for most adults is non-retirement savings, survey finds

Israel Sebastian | time | Getty Images

There are more pressing financial goals for adults right now than building up their nest egg.

For 2022, only 17% have made retirement savings their top financial priority, according to First National Bank of Omahafrom the latest Financial Well-Being Survey. And nearly half of respondents — 46% — said they have less than $15,000 saved for retirement.

In addition, 59% fear not being able to retire at 65.

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The survey was conducted in February of more than 1,000 American adults and was weighted to reflect population.

So what are people focusing on the most when it comes to their finances this year? Around 40% said increasing non-retirement savings is their primary goal, and a further 30% identified paying down debt.

“While it’s a key part of your financial well-being, the priority placed on retirement savings depends on where you are in the retirement thinking cycle, what you have in savings and your personal circumstances in terms of employment, amount of debt, etc.,” said Sean Baker, executive vice president of the individual client segment for First National Bank of Omaha.

Retirement security is a pressing issue for many workers, as research consistently shows that many people have little saved for their golden years. With fewer traditional company pensions, retirees typically have to rely on Social Security and their own savings to fund a retirement that could span two or three decades.

About a quarter of American adults have no retirement savingsaccording to a report by PwC. Among retired savers, the median 401(k) account balance for people between the ages of 55 and 64 — that is, people who are typically approaching retired status — is $84,714, according to Vanguard’s latest report. How Americans Save report.

Generally, it is recommended to have 10 times your annual salary saved if you want to retire at 67, according to Fidelity Investments.

While it can be difficult to balance retirement savings with other financial priorities, it’s worth trying to save what you can, said Kathryn Hauer, Certified Financial Planner at Wilson David Investment Advisors. in Aiken, South Carolina.

“One way to handle requests is to commit to depositing an amount, however small, into a 401(k) or [individual retirement account]”Hauer said.

If you can’t do that, “start small with irregular deposits of any random amount you can spare,” she said. “Every little bit counts.”

For 401(k) plans, the contribution limit for 2022 is $20,500, with those 50 and older eligible for an additional “catch-up” amount of $6,500 (for a total of $27,000). For IRAs, whether Roth or traditional, the contribution limit for those eligible this year is $6,000, with an additional $1,000 if you’re at least 50 years old ($7,000 total).

The First National Bank of Omaha survey also showed that 30% of respondents believe their overall financial well-being is better than it was before the pandemic, and 44% said it was at roughly the same.

About a third (34%) say they believe their credit history hinders their financial well-being.