Americans are behind in the race to save enough for retirement, but they’re finally doing something about it, a new survey shows.
Baby boomers are willing to scale back vacations. Generation Xers are poised to downsize homes. And millennials say they’ll hit downtown restaurants and clubs less often.
Sixty-two percent of Americans say they need to catch up and build up their nest eggs, according to a survey of 1,015 adults last month by TD Ameritrade. Thirty-eight percent say they started saving and investing early. The survey, provided exclusively to USA TODAY, was conducted by Harris Poll.
“The majority of people realize they do need to catch up,” says Keith Denerstein, director of investment products and guidance at TD Ameritrade. “They are willing to take the steps necessary.”
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Gen Xers lag
Generation Xers (ages 39-53) are in the direst shape: 73% say they must make up ground, compared with 66% of millennials (23-38) and 51% of boomers (55-73).
Gen Xers, Denerstein says, were caught between the phaseout of traditional company pensions and the rollout of 401(K) plans. They faced mid-career layoffs during the Great Recession of 2007-09 that set back their careers and investments, as well as stagnating wages during the slow recovery from the downturn, he says. Thirty-one percent of Gen Xers cited inadequate income as the main reason they fell behind, as did 27% of boomers.
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Thirty-seven percent of millennials point to housing costs as the biggest factor. Many young adults prefer to live in expensive downtown areas.
Partly as a result of the obstacles, 28% of boomers, 18% of millennials and 16% of Gen Xers have maxed out their 401(k) contributions, the survey shows.
Downsize, dial back, brew your own
Households are prepared to make trade-offs to get back on track. Forty-three percent of Gen Xers and 41% of boomers are most likely to downsize homes. Among boomers, 53% say they would brew coffee at home and 42% would take more modest vacations. Forty-one percent of millennials say they’ll dial back on going out with friends.
Telese Williams, 49, of Atlanta, who does installation and repair for a heating and air conditioning company, has $40,000 in a 401(k) account that she amassed during her 15 years with the company. In prior maintenance jobs, “I wasn’t thinking about it,” Williams says, largely because retirement was decades away.