Nearly Half Don’t Save and May Never Save

Almost half (45%) of non-retired Americans are not saving for retirement, according to an Edward Jones retirement age survey.

What American investors say they will do and what they actually wind up doing to save for retirement shows a big gap, according to an Edward Jones retirement age survey.

Nearly half (45%) of non-retired Americans are not saving for retirement. Of those not yet saving, only 36% plan to do so in the future and nearly 10% say they never plan on saving for retirement.

The study also found significant discrepancies by age among those who have not yet started saving. Although they plan to save in the future, the majority (58%) of the study’s youngest non-retired respondents (ages 18 to 34) have not yet started. 

One disconnect—between the expectations Americans have for retirement savings strategies and the reality of what they do—is striking, according to the survey findings. Almost all respondents ages 18 to 35 (90%) say they have started or plan to start saving for retirement before they turn or turned 30. Just 7% of that group plan to start saving for retirement in their 40s. 

The next age group—35- to 44-year-olds—revealed a significant increase in those who did start or planned to start saving for retirement in their 40s, with more than one-quarter (26%) saying so.

“While intentions to save for retirement are legitimate, individuals tend to satisfy more immediate, short-term spending goals and push off their long-term saving goals,” says Scott Thoma, principal and investment strategist for Edward Jones. “This behavior can be incredibly detrimental for individual investors, particularly as they enter the critical savings periods of their 30s and 40s when they have, and unfortunately waste, a tremendously valuable asset: time.” 

Nearly all (90%) of the study’s youngest respondents indicated they either plan to start or did begin saving in their 30s or earlier. However, only 64% of respondents ages 35 to 44 actually began saving in their 30s or earlier. 

Just 22% of overall respondents indicated that they plan to start or actually did begin saving between the ages of 40 and 50. However, when examining the plans versus reality among respondents ages 35 to 44 and 45 to 54, this percentage jumped, to 3% and 30%, respectively, indicating that intentions tend to fall short.

Household size and number of children also influences how people save. Households with at least one child are less likely to be saving for retirement (51%) than people who live alone (39%). Households with children that are saving (49%) are possibly facing other financial challenges than those without children (58%).

The survey of more than 1,000 non-retired and retired Americans was conducted by phone from February 12 to 15 by ORC International’s Telephone CARAVAN Omnibus on behalf of Edward Jones. Edward Jones provides financial services for individual investors in the United States and, through its affiliate, in Canada.