After an extended period of inflationary pressure and increased economic uncertainty, American workers now believe they'll need to save an average of $1.8 million for retirement, according to new survey data published by Charles Schwab.
The survey results show how inflation and market volatility are hurting workers' ability to save for retirement to a greater extent than last year, says Brian Bender, head of Schwab Workplace Financial Services.
"When inflation persists for an extended period of time, workers are inevitably going to feel a deeper impact on their wallets," Bender warns. "While many workers are trying to cut back on spending, some costs are unavoidable and certain areas of their finances have taken a hit."
Some more positive findings from the survey suggest that, despite these challenges, retirement saving continues to be a priority for workers. Most have maintained their 401(k) savings rates and otherwise stayed on top of their 401(k) plan investments over the past year.
Findings Show Lingering Challenges
The new survey, which covers a nationwide sample of 1,000 401(k) plan participants, finds that 62% of workers see inflation as an obstacle to saving for a comfortable retirement, up from 45% last year."
At the same time, 42% say stock market volatility is an obstacle, up from 33% last year, while nearly eight in 10 (78%) say these conditions are impacting their spending and saving habits. Furthermore, 36% plan to delay retirement as a result.
As noted, Schwab's data shows workers now believe they'll need to save an average of $1.8 million for retirement, compared to $1.7 million last year. Only 37% of workers think it's very likely they'll achieve this target, down by 10% from last year.
