"We find that roughly two in five Americans are on track to meet their retirement spending needs. But retirement readiness is not black and white. The typical American will have a $5,000 annual spending shortfall in retirement. That means possibly needing to cut back on spending, work a year or two longer, tap into home equity, or lean on family."
"The good news? We have seen considerable progress. Defined contribution plans are making a difference. People who have access to them are almost twice as likely to be ready for retirement (54%) than those who don't (28%). More people have access to a defined contribution plan today than ever. And if we were able to expand access to all, we could close much of the retirement readiness gap for the typical American."
"We also see progress across generations. Among baby boomers, 40% are on track for retirement, while among Gen Z almost half (47%) are positioned for success. Still, younger generations have a lot to contend with. Rising debt, inflation, and health care and housing costs have put pressure on these generations' capacity to save; millennials, for example, carry twice the nonhousing debt that baby boomers had at their age."
Applying market projections to household balance sheets yields a national forecast of retirement readiness. Roughly two in five Americans will meet retirement spending needs, while the typical household faces a $5,000 annual shortfall that may require reduced spending, later retirement, tapping home equity, or family support. Access to defined contribution plans markedly raises readiness—54% versus 28% without access—and broader access could substantially close the gap. Younger generations show improved outcomes, aided by auto-enrollment and better plan design, but rising debt, inflation, and health and housing costs constrain their ability to save.
#retirement-readiness #defined-contribution-plans #retirement-savings-shortfall #generational-savings-trends
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