Americans are losing confidence in their ability to cash in on Social Security benefits in retirement, according to the 21st Annual Transamerica Retirement Survey.
Nearly three-quarters of U.S. workers worry that Social Security won't be there for them when they retire, while 21% expect to rely on Social Security throughout retirement.
The survey showed less than a quarter 24% of workers feel confident in their ability to retire comfortably. They saved a median of $93,000 in household retirement accounts, which is less than the amount that experts recommend consumers should have saved. The majority of consumers plan to work in retirement, either on a full-time or part-time basis.
Despite the fact that the pandemic has its challenges, it is remarkable that workers are focused on their future retirement, said Catherine Collinson, CEO and president of Transamerica Institute. Many are still at risk of not achieving long-term financial security. Keep reading to learn more about the study's findings, as well as how to prepare for retirement. You can find a wide variety of financial products, such as debt consolidation loans and high-yield savings accounts, at Credible to help you achieve your retirement goals.
Half of workers said debt holds back retirement savings.
Half of the workers 49% surveyed by Transamerica reported that debt is interfering with their ability to save for retirement. One in six respondents, 17%, said they had new credit card debt due to the Pandemic-related financial strain.
62% of consumers cite getting out of debt as a financial priority amid the COVID-19 epidemic:
40% want to pay off credit card debt.
Credit card debt can be an expensive burden that prevents consumers from reaching other financial milestones, including saving for retirement. It may keep you out of debt by making minimum payments on credit card balances, but it comes at the high cost of credit card interest rates.
It may be possible to pay off credit card debt on better terms with a debt consolidation loan. This type of personal loan you can repay in monthly installments is a type of personal loan that you pay at a low fixed rate. The Federal Reserve's personal loan rate is 9.09% per two-year period, compared to 16.44% for credit card accounts assessed interest.
An emergency fund is an important safety net that can help workers avoid tapping into their retirement savings or taking out high-interest credit card debt for unexpected expenses. Nearly half of the survey respondents said that building their emergency savings is a priority.
It is recommended that consumers have a robust emergency fund that covers about 3 to 6 months worth of expenses. The study found that Americans aren't saving nearly as much, while the median emergency fund is $5,000 for U.S. workers. Workers with a household income of less than $50,000 have just $250 saved for emergencies.
If you want to make it a priority to build your emergency savings, consider setting up a Direct Deposit from your paycheck into a high-yield savings account that earns interest. Savings account rates can be compared for free without any impact on your credit score on Credible.
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