The average worker in the U.S. doesn't start saving for retirement until they're 31, a new survey commissioned by the Nationwide Retirement Institute revealed.
Of the more than 1,100 employed Americans surveyed, 76% said some factor has prevented them from contributing as much as they wanted to their retirement plan.
Employed survey respondents cited three main factors preventing them from saving the amount they wanted for retirement: not making enough money (44%), daily expenses (41%) and paying off debt (38%). However, when asked what age people should start saving for retirement, 42% said between the ages of 18 and 24, while 35% said between 25 and 30.
When asked how much they have saved for retirement, 26% percent of respondents said they have less than $1,000 in savings, while 45% said they have $1,000-$25,000 in savings,and 56% have $25,000-$100,000 in savings. All told, only 22% of employees say they feel "very prepared for retirement," according to the survey.
"Most people thought they should start saving earlier but in reality haven't," said John Carter, president of retirement plans for Nationwide, in a phone interview. "So, what's getting in the way? It might be debt, like student loans, it might be other rising costs, like buying a home or child care."
According to Mr. Carter, the main problem is that many employees look at paying off debts and saving for retirement "in a linear fashion." That is, they often decide to pay off student loans first, then save for retirement.
"You want to start (saving) sooner rather than later," Mr. Carter said. "Small adjustments, especially when it comes to retirement savings, can make a huge difference with your overall plan. Maybe this is the year to use that holiday bonus to start an IRA."
A Harris Poll surveyed 2,012 U.S. adults aged 18 and older, 1,161 of whom were employed, Nov. 6-9 on behalf of Nationwide.