For many young Americans, it can be quite hard to convince them to save money and prepare for retirement. As retirement would likely be about three to four decades away for these individuals, this is something they typically do not pay much mind to, but a new study suggests that younger consumers can be persuaded to save if asked if they want to retire ahead of schedule.
The study was conducted by MoneyRates.com through polling company Op4G, and according to the website, people who start saving for retirement before 30 have a better chance of retiring before they reach the age of 60, as compared to those who only start saving when they are in their 30s. Still, the MoneyRates survey also revealed that most consumers do just that – save money when in their 30s – and a good number of consumers start even later in life, if at all. Another key finding was that women these days face a greater amount of retirement uncertainty, as compared to men.
With those findings in mind, MoneyRates listed five key takeaways from its study, which involved about 1,900 adult men and women who were asked about how they save money (or if they even save), and what their plans are for retirement. One of the most important takeaways, as mentioned above, was that only 52 percent of consumers started saving by the age of 40; specifically, 27 percent said they began saving for retirement in their 20s, while 25 percent began to save between the ages of 30 and 39. While it may be tough saving up at a time when one is not earning too much yet, compound interest can come into play, even when saving a small amount of money at first.
MoneyRates stressed that having good savings habits, or saving while still young, does have a big payoff in the end, which is early retirement. The study showed that consumers who began saving for retirement while in their 20s had a 66 percent better chance of retiring by age 60 than those who only started saving when they were in their 30s. As for late starters, or those who only began building for a retirement nest egg in their 50s, only 52.5 percent said they expect to retire at the age of 70. Over one-fourths of these consumers, unfortunately, admitted that they are not sure whether they would be able to retire or not.
Consumers in their 30s are still considered far from retirement age, but MoneyRates found that those who do not start by their 30s would likely keep procrastinating over time. 34 percent of respondents in their 20s said they have not yet begun to save, as compared to 29 percent of those in their 30s. Still, it was found that a similar percentage of respondents in their 40s and 50s said they have not yet started saving for retirement.
For many decades, women have had to deal with pay discrepancies as compared to their male counterparts, and that was stated as a possible reason why women face greater retirement uncertainty than men do. 78 percent of male respondents said that they expect to be retired when they reach 70, while only 57 percent of female respondents said the same. 43 percent of women said they are not sure if or when they would be able to retire, as to only 22 percent of men.