Americans are losing confidence in their ability to monetize social benefits upon retirement, according to the 21st Annual Transamerica Retirement Survey.
Nearly three-quarters (73%) of American workers are concerned that social security will not be there for them when they retire, even though 21% expect to rely on social security throughout retirement.
Less than a quarter (24%) of workers feel “very secure” in their ability to retire comfortably, the survey showed. They have saved a median of $ 93,000 on all household pension accounts, which is well below the amount that experts recommend to consumers should have saved. As a result, the majority of consumers (57%) plan to retire, either full-time or part-time.
“Despite the immediacy of the pandemic and its challenges, it is remarkable that workers remain focused on their future retirement,” said Catherine Collinson, executive director and president of the Transamerica Institute. “Yet many still risk not achieving long-term financial security.”
Continue reading to learn more about the results of the survey, as well as how you can better prepare for retirement. And to help you reach your retirement goals, you can also visit Credible to compare a wide range of financial products, such as debt consolidation loans and high-yield savings accounts.
Half of the workers said debt holds back their retirement savings
About half of the workers (49%) surveyed by Transamerica reported that debt disrupts their ability to save for retirement. In addition, one in six respondents (17%) said they had accumulated new credit card debt due to pandemic-related financial burden.
Yet 62% of consumers mention getting out of debt as an economic priority in the midst of the COVID-19 pandemic:
- 40% want to pay off credit card debt
- 31% want to pay off their mortgage
- 16% want to pay off student loans
Credit card debt can be a costly burden that hinders consumers from achieving other financial milestones, including retirement savings. To make the minimum payment on your credit card balances can keep you out of crime, but it comes down to the high cost of credit card interest rates.
It may be possible to pay off credit card debt on better terms with one debt consolidation loans. This is a form of personal loan that you repay at a low, fixed interest rate in consistent monthly installments. The average two-year personal loan rate is 9.09% according to Federal Reservecompared to 16.44% for credit card accounts rated interest.
If you have set yourself the goal of repaying your debt before retirement, you can visit Credible to compare prices on a number of financial products, including debt consolidation loans, refinancing of mortgages and refinancing student loans.
Emergency savings are ‘alarmingly low’
An emergency fund is an important safety net that can help workers avoid spending their retirement savings or taking out high-interest credit card debt for unexpected expenses. Nearly half (45%) of those surveyed said so building up their emergency savings is a current economic priority.
It is recommended that consumers have a robust emergency fund that covers about 3 to 6 months of expenses. And while the average emergency fund among U.S. workers is $ 5,000, the survey showed that lower-income Americans have not saved nearly as much. Workers with a household income of less than $ 50,000 have only $ 250 saved for emergencies.
If you have set yourself the goal of building up your emergency savings, you may want to consider making a direct deposit from your paycheck to a high-performance savings account that bears interest. You can compare prices on savings account for free without affecting your credit score on Credible.
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