Did you know that a striking sixty-nine percent of American adults set a money-related goal for the New Year? Even more impressive, 74% of these individuals feel confident they can achieve these goals, according to a survey conducted by Motley Fool Money. However, maintaining that optimism past January can be challenging for many.
When it comes to personal finance, many U.S. respondents express uncertainty about their knowledge. A recent report from Checkbox, a professional survey software provider, revealed that only about one-third (36%) of Americans feel confident in their financial literacy. This lack of confidence can be a significant barrier to achieving financial goals.
Only 25% of Americans start retirement planning at the correct age
It’s no wonder that Americans’ saving habits and retirement planning may not be positioning them for success during their golden years. With a staggering 40% of Americans saving less than 5% of their income, as revealed by Checkbox’s research, this statistic underscores a critical issue in personal finance.
Many are struggling to balance daily expenses with long-term financial goals, raising concerns about their ability to secure a comfortable future. This alarming trend highlights the urgent need for individuals to assess their financial literacy, set realistic money-related goals, improve saving habits, and strategically plan for retirement.
The State of Savings in America
Based on data from LendingTree, the average salary in the U.S. in 2023 stood at $65,470. This suggests that individuals might be contributing as little as $273 monthly toward their emergency funds or retirement accounts. Such minimal savings can be precarious, especially in unforeseen circumstances or long-term financial planning.
The survey conducted by Checkbox revealed that a significant 77% of respondents cited the high cost of living as a major barrier to saving. However, there’s a silver lining: 10% of those surveyed aim to open savings accounts, and 17% believe that acquiring better financial knowledge could enhance their ability to save more effectively.
Related: Your Retirement Savings Won’t Last If You Make These 3 Common Mistakes, Financial Advisor Warns
Retirement Insecurity: A Growing Concern
According to Checkbox’s findings, nearly 60% of Americans feel insecure about their retirement plans, a concern exacerbated by the fact that over a third don’t have any retirement plan at all.
Among those who do, only a quarter began planning before turning 25, with 42% relying solely on a “basic 401k scheme” and 24% admitting they lack understanding of their retirement savings options. This data highlights the urgent need for improved financial education and strategic planning to ensure a secure and stable future for all.