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Why Aren't Americans Saving for Retirement?

| March 15, 2019
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Financial experts have been warning for years about the importance of saving for retirement. The news is filled with stories about seniors returning to work or delaying retirement because they don’t have enough in savings and can’t survive on Social Security alone. Despite these warnings, surveys show that a staggering number of households still have little or nothing saved for when they leave the work force. So why aren’t Americans saving for retirement? The latest surveys reveal the barriers that make saving difficult, along with easy ways to save money for retirement that anyone can use.

Credit: Go Banking Rates

Lack of money

According to a 2018 Go Banking Rates Retirement Savings survey, not making enough money was cited by 40 percent of respondents as their reason for not saving for retirement. Struggling to pay bills was the main barrier for nearly 30 percent of those surveyed. A recent survey by PurePoint Financial presents a more nuanced view, discovering that poor savings habits and lack of financial knowledge also play a role.

Credit: Fidelity

Lack of financial knowledge

One of the barriers to building up retirement funds is lack of financial knowledge that leads to poor saving decisions, according to the 2018 survey by PurePoint Financial. It found that just 52 percent of Americans have money saved in a retirement account. Of those that saved, 73 percent of those surveyed were not actively seeking the best rates or places to save their money. Nearly half of respondents simply chose the same institution where they had their checking account, and 4 in 10 believed that their checking and savings account have the same interest rate. Since the average rate of return is significantly higher for investments, making this money mistake could cause the accounts to have thousands less by the time the owners reach retirement. 


Poor saving habits
73 percent of respondents to the PurePoint Financial survey listed financial savings as one of the three most important factors in their future. 79 percent stated that saving is their most rewarding activity, even more than losing weight. Despite recognizing the importance of saving for retirement, those surveyed admitted to indulging in poor savings behavior:

  • 1 in 3 would take $1,000 now over $3,000 in a year
  • 2 in 5 would spend 4x a much in transportation to save 20 minutes
  • More than one-third would go into debt rather than saving for a purchase

 If these surveys accurately portray your financial situation, there are three easy ways to save money for retirement you can try:

Credit: Fidelity

  • Save a little at a time
    A big barrier to saving for retirement is believing you need to save a lot to make the effort worthwhile. If you’ve been waiting because you wonder, “do I have enough money to invest,” you could be missing out on years of interest. Instead, you can start by saving for retirement in little ways. Begin by investing as little as 1% of your salary in your employer’s retirement plan and set your account to automatically increase your savings by another percent each year. This small amount is typically won’t affect your finances but will grow over time.

  • Invest your money
    Stashing your money in your checking account, family savings account, or worse yet, as cash stored in your home, is not going to give you the funds you need when you retire. When you compare the average return rates for investments with the rate on checking accounts, the difference it could make by the time you retire is significant. Investing in a 401(k) plan is an easy way to start.


  • Start saving now
    If you’re wondering when to start retirement savings, the time is now. Because of the way that compound interest works, the earlier you start savings, the less you have to contribute each month. If you wait to start saving at age 35 vs. age 25, you would have to save hundreds more per month to have the same amount in the account by the time you retire.


If you would like help figuring out how to start saving for retirement, or would like help creating a financial plan, reach out to skilled financial planner Matt Logan, at or call 336-540-9700.

Matt Logan is a Representative with Matt Logan Inc and Summit Brokerage and may be reached at, 336-540-9700 or [email protected].  

Matt Logan Inc. is an independent firm with Securities offered through Summit Brokerage Services, Inc., Member FINRASIPC. Advisory services offered through Summit Financial Group Inc., a Registered Investment Advisor. Summit Brokerage Services, Inc., its affiliates and Matt Logan Inc. do not give tax or legal advice. You should consult an experienced professional regarding the tax consequences of a specific transaction. These are the views of Matt Logan Inc, and not necessarily those of Summit Brokerage Services, Inc. and any of its affiliates and should not be construed as investment advice.

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