Why one-third of Americans aren't saving for retirement

More than a third of US adults haven't started saving for retirement, according to a recent survey from Bankrate. Retirement saving is a low priority for many Americans as the cost of living rises and more families live paycheck to paycheck.

Ed Andrieski/AP/File
William Kistler, right, goes over a clients' information with support specialist Ronald Smith at Kistler's office in Denver on July 8th. Sixty-three-year-old Kistler views retirement like someone tied to the tracks watching a train coming: It’s looming, it’s threatening and there’s little he can do.“There is not enough to retire with,” said Kistler, a Golden, Colorado, resident who said he is unable to build up a nest egg for his wife with his modest salary helping seniors navigate benefits. “It’s completely frightening to tell you the truth. And I, like a lot of people, try not to think about it too much, which is actually a problem.”

For many Americans, more immediate financial needs are putting retirement savings on the back burner. 

According to a national survey by Bankrate.com, 36 percent of US adults say they have not started saving for retirement. And it isn't just the youngest adults: a significant swath of those on the cusp of retirement haven't put anything away, including 14 percent Americans 65 and older and over a quarter (26 percent) of Americans between ages 50 and 64. 

"What concerns me most is the high percentage of people that haven't started saving for retirement," says Greg McBride, CFA, Bankrate's chief financial analyst said in a statement accompanying the findings. What's worse, he added,  "many of those that are saving aren't saving all that much."

Perhaps predictably, the youngest adults were the least likely to have put anything aside: Among 18-to-29-year-olds, 69 percent said they aren't saving for retirement. For those  ages 30 to 49, the savings rate was 33 percent. 

Some of  the non-savers told Bankrate that they are planning to work work for their entire lives and don't need to plan for retirement. But Gail Cunningham, spokeswoman for the National Foundation for Credit Counseling, said "these people are not considering the potential of a job loss or medical issue that prevents them from working."

If fewer Americans are planning financially for their long-term futures, it may be because things are getting more expensive in the near term. In another study released Monday, The US Department of Agriculture found that the cost of raising a child born in 2013 to the age of 18 has reached  $245,000. For a high-income family in the urban Northeast, the USDA found, that number could reach $455,000. To boot, those figures don't include college tuition, an expense that continues to balloon. Brian Plain, a financial planner from Oak Park, Ill. said those rising costs and more families living paycheck-to-paycheck that make it harder for families to save for retirement.

"I think a lot of people want to save, but they keep waiting for the right time," Mr. Plain said in a statement. "They'll say things like, 'When I get my next raise I'll start saving.'"

But, Mr. McBride said in the release, there is no better time than the present to start saving. "The key to a successful retirement is to save early and aggressively, but even those on the cusp of their golden years should have some money allocated toward equities as opposed to all cash and bonds."

There is one solid way to ensure fiscal stability during retirement, – start saving early. Twenty–year-olds who begin saving $100 a month will have $367,000 socked away by the time they reach age 65, McBride points out.

"The younger you are, the more of an ally time becomes," McBride said. "The power of compounding is most evident over long periods of time, and having a longer period of time for your retirement savings to grow and compound makes today's contributions much more impactful.”

According to Bankrate, this is the first time they asked survey participants about retirement savings.

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