There's good news and bad news to report on the retirement readiness front, at least according to a recent survey. The good news is that many Americans are about as confident as they were last year that they'll be able to live comfortably once they decide to leave the workforce. The bad news? Those that are optimistic are fairly few and far between.
Only 1 in 5 full-time workers fully anticipates having enough money to last through retirement, a newly released survey from Principal Financial Group reveals. That's effectively unchanged from last year when a similar survey was performed, falling 1 percent.
Horning in on many Americans' retirement optimism is debt. Up 2 percent from last year, 15 percent of respondents said that they anticipate debt being a major problem in their retirement years.
Debt more common for those who have money to spend
Debt is an issue that spans the generations, as one segment of society is no more likely than another to be in this financial condition. However, there is some evidence to suggest that those who have the money to spend tend to be more indebted than others. This is particularly true for those who readily admit to enjoying the ability to spend, especially when compared to what pleasure they get from saving. In a recent poll conducted by Gallup, those who said they liked to spend more than save were more likely to carry credit card debt, auto loan debt as well as personal loan debt.
Even though there is a litany of ways to save, nearly half of Americans acknowledge that they wouldn't be able to pay for something important in an urgent situation, suggesting that they haven't saved enough. At 48 percent, nearly half of respondents in a separate Gallup poll said that they couldn't afford a major purchase or repair if something were to come up unexpectedly.
"Saving is a highly prioritized goal for millennials in 2016."
2016: A year for saving?
This may explain why more people are prioritizing saving money for when emergencies transpire. Over one-third of millennials ranked saving as their top priority for 2016, based on a separate study conducted by the Ad Council and the American Institute of Certified Public Accountants. A higher number of participants pointed to saving as their foremost goal versus other more common resolutions, like losing weight, or living a healthy lifestyle.
Gregory Anton, chairman of the AICPA's National Financial Literacy Commission, pointed out that given the high cost of living and the bills that can seem relentless, many view saving as a fruitless effort, particularly millennials.
"Many young adults think saving is impossible," Anton explained.
He added that while there is some truth to the fact saving is difficult, especially when also trying to work down a high debt load, setting up a budget is key. Once one is established, it's important to stick to it as much and as often as possible.
"Establishing a disciplined saving strategy early in life and avoiding missteps will reap substantial long-term dividends," Anton said.
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