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%</…….