NASHVILLE, Tenn. (WTVF) — A recent survey found that more than half of U.S. adults are anxious about their finances.
One of the biggest things is retirement. People have seen their 401k's take huge drops in the last year or two meaning a lot of people now feel they have to work longer and save more money.
This year, it's been harder to stretch a dollar.
"Inflation is really psychological for folks, as much as it impacts our bank accounts,” said Michael Goldberg, Associate Professor of Design & Innovation at the CWRU School of Management.
Consumers are really feeling the pinch at the grocery store, where food prices are up 13 percent from this time last year. And at the pump where the national average price per gallon hit 5 dollars this summer.
So economists say it’s no wonder many are also stressing about retirement.
"Because they’re worried about the present, they’re naturally worried about the future and making sure they have enough savings to sustain them for those years when they’re not going to be bringing in significant income,” Goldberg said.
This month, one survey found more than half of working Americans feel behind on their retirement savings.
Another found the average adult plans to retire at 64 and expects to need more than a million dollars in their retirement savings.
That’s a year and a half older and almost a quarter of a million dollars more than last year.
Financial advisors point to the current market conditions.
“This has, like, never happened…so if you go back in history, the times that the stock and bond market were down at the same time is extraordinarily rare,” said Brian Pietrangelo, Managing Director of Investment Strategy at KeyBank.
"When you put those two together, that’s 90 percent of people’s wealth for retirement," said wealth advisor at Cleveland Wealth, Corbin Blackburn. "Naturally, that causes a lot of emotion, a lot of doubt that’s there.”
How much you need to save for retirement depends on when you plan to stop working and your standard of living.
“Step one, understand what you’re going to need to spend in retirement. Step two is to then create a plan to generate that income. But make sure it’s a plan that can weather the storm, like we’re seeing this year,” Blackburn explained.
And the earlier you can begin saving, the better, even if you start small.
"The key is not how much you’re putting away. It’s starting the process of gaining confidence to put away money in a retirement plan over the long-term, like a habit,” Pietrangelo said.
Financial experts also recommend regular financial check-ups and while it’s easy to panic about the current state of your savings, they say the long-term game is the most important.
"Take a step back, look at it according to your plan and figure out what the right path is forward,” Blackburn said.
And don't forget to take advantage of your employer 401(k) contribution match. It's basically free money and it can make a big difference in how much money you have when you retire.
Most companies that have 401k plans also will match employee contributions anywhere generally from three to six percent of your annual salary.
