50% Of Americans Feel Behind on Saving for Retirement: Here Are 8 Ways To Get Back on Track

Retirement is supposed to be the golden phase of our lives, a time to relax and enjoy the fruits of our labor. However, a recent FinanceBuzz survey reveals a stark reality.

Over half of Americans feel they're falling behind on their retirement savings, and they have a laundry list of culprits to blame, including student loans, low income, and the ever-looming specter of inflation.

Wondering how you compare to other Americans who are planning for their golden years? Here are five reasons you might be falling behind and seven tips to help you get back on track.

According to the FinanceBuzz retirement survey, a whopping 53% of respondents believe they're trailing their peers in the race to financial freedom post-retirement.

Digging deeper into the data, it becomes evident that the sentiment is pervasive across generations.

From Baby Boomers to Gen Z, at least 44% in every age group expressed feeling behind, highlighting a widespread concern that transcends generational lines.

What is the top villain in these financial struggles? Low earnings were cited by 41% of participants as the primary roadblock to their retirement savings.

This marks a notable increase from just two years ago when only 29% identified income as a hindrance.

It's clear that economic challenges are escalating, leaving many grappling with the question of how to secure a comfortable retirement.

As if low income wasn't enough, student loan debt has emerged as a formidable obstacle for millions. With more than 40 million Americans burdened by student loans, the recent resumption of payments has sent shockwaves through the financial landscape.

The survey discloses a stark reality that 54% of student loan borrowers anticipate contributing less to their retirement savings due to the restart of student loan payments.

The federal government's pause on student loan payments during the COVID-19 pandemic provided temporary relief for many. However, the financial stress for those still grappling with educational debt has recently increased again since that is no longer available.

Forty percent of survey respondents cited inflation as a significant obstacle to retirement savings. The recent surge in inflation rates has eroded the dollar's purchasing power, making it challenging for individuals to effectively save for their retirement goals.

Inflation impacts everything from the cost of living to the value of investments, leaving savers with the daunting task of trying to outpace the rising tide of prices.

It's a reminder that effective retirement planning requires more than just diligent saving. It also requires navigating the economic landscape with an understanding of inflation's potential impact.

More than a quarter of Americans (28%) haven't started saving for retirement at all. This includes a staggering 44% of Gen Z respondents, the youngest age group surveyed.

This suggests a pressing need for financial education and awareness, especially among the younger generation, to ensure that they don't face an uphill battle when it comes to securing the financial future they want.

If you feel behind on your retirement savings, it's important to understand that it's never too late to make positive changes to your finances.

Even if you don't have a lot to save, it's better to start small than not start at all. The power of compounding interest can make a big difference over time.

For example, if you start saving $500 per month at age 25 and earn a 7% annual return, you will have about $1.2 million by age 65. However, if you start saving the same amount at age 35, you will have only about $567,000 by age 65.

Keep reading for tips to help you get your retirement savings back on track.

The first step is to look closely at your financial situation, including your income, expenses, and debts. You'll also need to understand your long-term retirement goals before making any big moves.

Once you have a good idea of where you stand compared to what your retirement goals are, then you can make smart money moves to help you get on track.

One way to measure your progress is to use a retirement calculator, which can help you estimate how much you need to save based on your age, income, expenses, and desired retirement lifestyle.

Develop a budget that aligns with your financial goals and allows for consistent savings.

Once you have your budget, try to identify areas where you can cut expenses and redirect funds toward your retirement savings.

A budgeting tool like Rocket Money can help make budgeting easier and help you spot ways you might be wasting money, like with unwanted subscriptions.

If your employer offers a retirement savings plan with matching contributions, you may want to take full advantage of it. This is essentially free money that can significantly boost your retirement savings.

If you don't have access to an employer-sponsored retirement account, another option is to open a Roth IRA or Traditional IRA, where you can contribute more tax-advantaged dollars.

Explore opportunities for additional income, such as a side hustle or freelance work to make extra money.

There are tons of opportunities for extra cash, ranging from taking surveys to delivering food or even pet sitting. You can direct the extra income towards your retirement savings to accelerate your progress.

It's easier than ever to invest on your own, especially with one of the best investment apps. However, not everyone is comfortable doing it alone.

If this describes you, consider consulting with a financial advisor to get personalized guidance tailored to your unique situation.

A professional could help you make informed decisions and optimize your retirement savings strategy.

Don't forget to focus on paying down high-interest debts, especially those that hinder your ability to save for retirement. The longer the debt sits, the more interest can accumulate.

If you have credit card debt, one option is using a 0% intro APR credit card to help you pay it off faster.

You can transfer your debt to one of these cards and take advantage of a long period with no additional interest added to your debt. Once your debt is under control, you can focus more on your retirement savings.

You've probably heard the advice about skipping lattes and avocado toast already. But be open to lifestyle adjustments that could positively impact your financial well-being.

Whether it's downsizing your home, cutting unnecessary expenses, or exploring affordable living options, these changes can free up funds for retirement savings.

Remember, every step you take toward securing your financial future brings you closer to a more comfortable retirement.

Understanding the challenges, taking proactive measures, and seeking professional advice when needed can help you navigate the retirement maze with confidence and set the stage for a fulfilling post-work life.

Editor's Note: Generative AI tools helped write this story.