How Much to Save for Retirement Is Workers' Top Financial Concern: Survey

Greenwald Research fielded the survey in late July among 3,040 Americans between the ages of 25 and 70 with household annual income of at least $40,000.

Goals to Achieve Financial Resilience

The survey showed that a renewed focus on the components of a financial plan can help secure long-term financial security, TIAA said. According to the survey, the majority of Americans defined financial resiliency by succeeding on four goals.

Related: Retirement Effectiveness of 401(k)s Is Employers' Top Concern, Fidelity Reports

One was increasing retirement savings. Despite feeling off-track, retirement remains a top financial priority for many as they balance short- and long-term financial pressures.

Another goal survey respondents said contributed to financial resilience was having a source of guaranteed lifetime income in retirement. Nine in 10 agreed that once they reach retirement, it would be important to have a source of income that would not run out as they aged.

Among respondents who had guaranteed lifetime income, seven in 10 said this had made them feel more financially resilient throughout the COVID-19 pandemic. They were also more likely to feel positive about their finances looking forward over the next year than those without a source of lifetime income.

Building an emergency savings fund was another goal, with 77% of individuals now reporting that they had emergency savings despite ongoing financial hardships. Prior to the pandemic, 69% of respondents said they had emergency savings, with 47% believing those funds would cover six or more months of expenses.

Debt is common for many individuals today, and paying it down was a goal that could contribute to financial resilience, according to survey participants. Some 80% of respondents said they had some form of debt, credit card debt being the most common.

But one in four said they had four or more different types of debt. A quarter of these reported taking on new debt amid the pandemic, and this number rose to four in 10 for respondents under 40 years old.

The effect of debt on long-term savings is immense, according to TIAA. Fifty-five percent of respondents who reported having easily manageable debt said they were on track to save for retirement, compared with only 24% of those who characterized their debt as just manageable and a mere 6% who reported unmanageable debt.

TIAA noted that the emphasis people give each of these components shifts over the course of their life. Younger individuals in the survey value all four of these goals similarly, with debt repayment narrowly topping the list.

The importance of an emergency fund grows from there, peaking between ages 40 to 49. Then as people shift into their 50s and 60s, financial resiliency becomes much more synonymous with retirement security.

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