Retirement Savings Has Veered Off Track to Lowest Levels Since 2018, Says Fed Report
Many Americans dream of the day they can retire, but the years leading up to it require commitment and careful planning. Only three-fourths of non-retirees had at least some retirement savings, according to the Economic Well-Being of U.S. Households in 2022 report released by the Federal Reserve System in May 2023.
But among those with retirement savings, only 31% thought their retirement savings were on track, down from 40% in 2021 and 36% in 2018.
The report noted that retirement savings and perceived preparedness differed across demographic groups. Younger adults were less likely to have retirement savings and to view their savings as on track than older adults. There were also significant differences in retirement savings by race and ethnicity — Black and Hispanic non-retirees were less likely to have retirement savings and to view their savings as on track compared to White and Asian Americans. These patterns were the same as in previous years.
Retirement savers with a disability were also less likely to have retirement savings and to view their savings as on track. Forty-seven percent of non-retirees with a disability had retirement savings, and 13% considered their savings as on track.
According to the Social Security Administration, a new retiree at the age of 65 can expect to live 20 more years on average, The Hill reported. Without retirement savings, most retirees rely on Social Security checks. However, the average monthly payment is about $1,800 while the average household run by someone 65 or older spends more than $4,000 per month.
The Hill pointed out a Fidelity analysis estimating that the average retirement account lost one-fifth of its value in 2022, dropping from $135,600 to $104,000.
“There were a lot of downsides in the last year,” Courtney Alev, consumer financial advocate at Credit Karma, told The Hill. “It really shows why it’s really important for everyone, no matter how old you are, to have a diversified portfolio.”
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