An overwhelming majority of retirement savers believe they are on track to retire comfortably, according to a new national poll conducted by Kiplinger in partnership with money management firm Personal Capital. Some 40% of savers are very confident that they’re on track for a comfortable retirement, and 44% are somewhat confident. The poll, conducted in November, surveyed individuals with at least $50,000 in retirement savings.
Most survey participants are saving diligently. Nearly 60% are stashing 10% or more of their income toward retirement, and about 30% of respondents are saving at least 15% of income. And 14% are supersavers, putting aside 20% or more of their income toward retirement. The vast majority (81%) say they have a workplace retirement plan, such as a 401(k), 403(b), 457, SEP IRA or solo 401(k). In addition, more than one-third (35%) have a traditional IRA, and 25% own a Roth IRA.
Among those with a workplace savings plan, about 80% have a plan that offers a matching contribution, and nearly 90% of those workers contribute enough to get the full match. The median match is 4% of pay. Nearly six in 10 (59%) say their employer offers a Roth 401(k) or other Roth option in their retirement lineup, and 74% of those workers are currently contributing to that option. Millennials (78%) and Gen Xers (73%) were more likely than baby boomers (61%) to contribute to the Roth.
A desire to do more. Even so, more than one-third of respondents (36%) say they would like to be saving 20% or more. Not surprisingly, older workers are saving more: The median savings rate for baby boomers is 14%, and about half say they would like to be saving 20% or more.
The median amount people think they will need in retirement is $540,846. But almost one-third (31%) of respondents expect to need a nest egg of $1 million or more. The closer they are to retirement, the more likely they are to say they are going to need a larger nest egg and more time in the workforce to retire comfortably.
The pandemic has created a few obstacles. Some 43% report experiencing a financial setback. Of those, more than half say they haven’t yet recovered from the setback. During the pandemic, almost one in five (19%) took out a loan from their workplace retirement plan. Among those, the median amount borrowed was $30,231. Those who borrowed from their workplace savings used the funds for living expenses (61%), medical bills (51%) and home repairs (47%). Here are survey highlights:
How confident are you that you will have enough savings to retire comfortably?
- Very confident: 40%
- Not confident: 16%
- Somewhat confident: 44%
How much of your annual income are you currently saving for retirement?
- Less than 5%: 14%
- 5% to 9%: 24%
- 10% to 14%: 27%
- 15% to 19%: 16%
- 20% or more: 14%
- Not sure: 5%
Does your employer offer a matching contribution to your workplace retirement plan?
- Yes: 80%
- No: 15%
- Not sure: 5%
If your employer offers a matching contribution for your workplace retirement plan, do you contribute enough to get the full amount?*
- Yes: 89%
- No: 7%
- Not sure: 5%
Does your employer offer a Roth 401(k) or another Roth option in its retirement plan?
- Yes: 59%
- No: 30%
- Not sure: 11%
Are you currently contributing to a Roth option in your workplace retirement plan?
- Yes: 74%
- No: 23%
- Not sure: 3%
If given the option to invest in cryptocurrency in your workplace retirement plan, how likely would you be to do so?*
- Very likely: 37%
- Somewhat likely: 33%
- Not likely: 29%
If given the option to invest in a fund with an ESG (environmental, social and governance) focus in your workplace retirement plan, how likely would you be to do so?
- Very likely: 42%
- Somewhat likely: 41%
- Not likely: 17%
Which of the following situations are likely to affect your expected retirement date?
- Becoming eligible for Social Security: 34%
- Experiencing a change in job status: 32%
- Paying off my mortgage: 31%
- Paying off other debt: 30%
- Reaching a specific savings goal: 29%
- Receiving an early-retirement bonus offer from my employer: 26%
- Syncing retirement with a partner: 25%
- Finish paying for my children’s college education: 12%
What changes have you made in anticipation that today’s low tax rates are set to expire by the end of 2025 or sooner?†
- I’ve been investing in a Roth IRA: 35%
- I’ve been converting a traditional IRA or other tax-deferred retirement account to a Roth IRA: 24%
- I’ve been investing in municipal bonds: 17%
- I’ve made no changes: 50%
Do you think that climate change will affect where you choose to live in retirement?
- Yes: 42%
- No: 39%
- Not sure: 19%
