Saving for retirement remains a struggle for most middle-class Americans, with 34 percent not contributing to any retirement account, whether a 401(k), an IRA or other savings vehicle, according to a new survey by Wells Fargo and Harris Poll.
Nearly a third (31 percent) of all survey respondents say they will not have enough money to financially “survive” retirement. The percentage of respondents who say this jumps to nearly half (48 percent) of middle-class Americans in their 50s.
Forty-one percent of middle-class Americans between the ages of 50 and 59 are not currently saving for retirement.
Those who have saved for retirement have a median of $20,000 saved, far short of the $250,000 they think they’ll need during that time of their lives, the survey found.
$125 a Month
Those who are building a nest egg save a median of $125 every month.
On behalf of Wells Fargo, Harris Poll conducted 1,001 telephone interviews from July 20 to August 25, 2014 of middle-class Americans between the ages of 25 and 75 with a median household income of $63,000.
Nineteen percent of all respondents have no retirement savings.
Sixty-eight percent of all respondents affirm that saving for retirement is “harder than I anticipated.”
The Power of the 401(k)
The survey found that middle-class Americans value the 401(k). Seventy percent of respondents have a 401(k) or equivalent plan available to them through their employer. And a majority of them (93 percent) are currently contributing to their plans.
Approximately 67 percent of those in a plan contribute enough to maximize their company’s 401(k) match, and the median contribution rate for those between the ages of 30 and 59 is 7 percent.
Eighty-five percent of those with access to a 401(k) or equivalent plan from their employer affirm they “wouldn’t have saved as much for retirement” if they did not have a 401(k). Moreover, 90 percent say the 401(k) or equivalent plan “makes it easy to save for retirement.”