Americans are Skipping Saving for Retirement in Favor of Emergency Funds, Paying Down Debt
The combination of high inflation and lingering economic fears tied to the COVID-19 pandemic could be pushing more Americans toward paying down debt and saving for emergencies instead of building retirement nest eggs, according to a recent survey from First National Bank of Omaha (FNBO).
FNBO’s 2022 Financial Wellness Survey of 1,059 U.S. adults, conducted in February, found that only 17% of respondents have made saving for retirement their top financial priority in 2022. That’s despite the fact that 59% of Americans polled fear they won’t be able to retire by age 65, and nearly three-quarters (73%) worry that Social Security will eventually run out.
A much larger percentage of respondents have other plans for their money. Four in 10 said increasing their emergency and day-to-day savings is a top priority, while 30% said paying off debt is a top priority. Another 30% said their financial well-being is better now than before the pandemic, and 44% said it’s about the same. Around one-third believe their credit history holds them back from securing financial wellness.
The survey also revealed that many Americans remain well behind on their retirement savings goals. Nearly half (46%) of respondents have less than $15,000 saved for retirement, and one-quarter say they have less than $1,000 in overall savings. About one-quarter of U.S. adults have no retirement savings at all, CNBC reported, citing data from PwC.
Those percentages might not rise any time soon, as 91% of the FNBO survey respondents expect inflation to continue rising throughout 2022. Forty-one percent said they are waiting for a market correction before they invest in the stock market more aggressively.
“The numbers from our survey demonstrate the extent to which knowledge and proper guidance all play an invaluable role in helping to build a smart financial future,” Sean Baker — FNBO’s executive VP, individual customer segment — said in a press release. “An important first step is to develop a financial roadmap. We recommend identifying short-term versus long-term goals and seeking out a trusted financial advisor that can help pave the way to achieving those goals.”
Here are some other survey highlights:
- To help boost their savings, 29% of respondents said they plan to get rid of their gym memberships, while 94% said they will cancel at least one of their streaming service subscriptions this year.
- Other financial plans include cutting spending in the following categories — eating out (64% of respondents indicated as much), clothes and personal items (49%), technology upgrades (43%), travel (40%) and housing expenses (31%).
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