Federal Retirement Study: Most Employees Don’t Have Enough Saved

Only 18% of American workers say they will be able to fully retire and live a comfortable lifestyle, according to the Transamerica Center for Retirement Studies® (TCRS). The organization recently released their 18th Annual Survey on the state of American retirement, with some shocking findings especially related to federal retirement.

Not only are Americans planning to live longer, with many people saying they expect to live past 90 or even 100, they are also worried about how they are going to afford to take care of themselves and loved ones during their golden years after work.

Today’s employees need to prepare to live 20 to 30 years after they retire and have enough savings to cover basic necessities, healthcare costs, and entertainment. With the right planning, employees across all industries, not just federal retirement candidates, will struggle during a period that should be filled with rest and relaxation.

56% of Americans Plan to Keep Working After They Retire

Turning 65 is typically the retirement goal, but Americans are changing the age of retirement and what it means to stop working. More than half of all Americans say they will continue working part-time after they officially retire.

For some workers, this is perceived as an optional opportunity. They want to keep their minds sharp and stay active even as they age. However, this statistic highlights darker problems currently facing others:

• 83% of Americans worry that they will lack the financial resources to fully retire.
• 57% of Generation Xers cite outliving their savings as one of their greatest fears.
• 76% of workers don’t think Social Security will be there when they need it.

57% of Generation Xers cite outliving their savings as one of their greatest fears. Find out what you need to know about saving for retirement to avoid this problem.Click To Tweet

This data highlights that worries about finances don’t just affect workers who are preparing for federal retirement, including candidates for voluntary early retirement. Even young people are concerned about their futures and considering alternative savings options like IRAs or Thrift Savings Plans (TSPs).

Most People Aren’t Saving Enough for Retirement

One of the main reasons why federal retirement worries plague both young and old employees is that both parties aren’t saving nearly enough to get by when they leave service. Baby Boomers only have a median $164,000 saved for retirement, while Gen Xers only have $72,000, and Millennials only have $37,000 as a median respectively. That isn’t nearly enough to support any generation for more than 10 years, much less 20-30 years.  

This data is confirmed in another study by Earnest, Amino, and Ipsos which found only 31% of Millennials are saving for retirement, and 46% of young people would scramble to pay their bills if their paycheck was withheld.  

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Many young people feel confused and overwhelmed at the idea of saving for the long run. There has been a significant shift in the private sector from investing in pensions to 401(k)s and IRAs. Even federal retirement planning has changed over the past few years, as CSRS recipients phase out of work and more employees switch to FERS or the popular Thrift Savings Plans (TSP) to save.

The Gen X and Millennial financial situation could lead to an employment or senior care crisis within the next few decades. Millennials who struggle to pay their bills today could continue to struggle into old age due to a lack of savings and missed opportunities for investing during their youth.

Workers Don’t Think They Need to Prepare for Retirement

One of the main reasons people might not be saving for retirement is because they don’t think they need to. More than half of Millennials don’t think they need to save for retirement until they’re older — a sentiment also felt by 32% of Gen Xers and 25% of Baby Boomers.

Unfortunately, this information is largely based on guesswork. Most people have no idea how much they need to save for retirement and therefore lack a goal to work toward. If people had a concrete number for how much they need to save, they would likely try to start putting aside money at a younger age. 

Start Planning for Your Federal Retirement Today

If there’s one common theme across this data and other popular surveys used to evaluate retirement planning possibilities, it’s that it’s never too early to start saving for retirement and setting up your finances to enjoy the maximum amount of benefits. Even if you’re only able to put away 1% of your income annually, you will be better off than if you set aside nothing.

The first step you can take is checking out our Federal Benefits Workbook or talking to one of our local benefits specialists. We can review your lifestyle, goals, and financial situation to determine if you’re set for federal retirement or if there are additional steps you could take.

Setting aside a few hours could mean the difference between financial confidence and continued worry. You want to spend your retirement relaxing and pursuing activities you love, and we can help you achieve that. Contact us to start planning today.