10 Sobering Stats on Retirement Planning in 2023

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American workers’ preparedness for retirement has declined significantly over the past year, with millennials seeing the greatest setbacks relative to other generations, according to new research published this week by Fidelity Investments.

As shown in the 2023 update of the firm’s recurring Retirement Savings Assessment report, which is based on a survey of more than 3,500 people utilizing Fidelity’s workplace and retail investment platforms, Americans’ overall preparedness has declined to “yellow” status on the readiness stoplight.

According to the survey data, just over half (52%) of the respondents are not on target and face modest to significant adjustments to their planned retirement lifestyle if they don’t take action to make up for the shortfall. This is up from 46% in 2020.

Fidelity experts say the decline in preparedness is being driven by two primary factors. On the one hand, people are saving less, and on the other, they are investing more conservatively. While these are natural reactions one would expect to see during a challenging financial environment — driven by lingering effects from the pandemic, heightened market volatility and the latest turmoil in the banking industry — they also reduce the chances of savers achieving their long-term financial goals.

In fact, according to Fidelity, among those taking a conservative approach, nearly six in ten (57%) respondents expressed concern about losing their savings by investing too aggressively. Such a position leaves them exposed to other risks, however, especially inflation risk and longevity risk.

See the slide show for a rundown of 10 sobering statistics contained in Fidelity’s new research.

(Image: Thinkstock)

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