Retirement saving isn't just a "future you" problem.
Most Americans aren't saving enough for retirement. In fact, most workers over 40 don't have sufficient retirement savings and aren't setting aside enough to catch up, according to an Insured Retirement Institute survey. The survey also finds that nearly six in 10 workers save less than 10% of their income, and one-third save less than 5%.
People aren't saving enough because they don't know what "enough" is, says Brandy Marion, Institutional Wealth education manager at BOK Financial®.
“Only 40% of people have even calculated what amount they need to save for retirement," said Marion. "So, it makes sense they're missing the mark. It's like trying to hit a bullseye with a blindfold on.”- Brandy Marion, Institutional Wealth education manager at BOK Financial
Set it and forget it
Marion said many workers don't take an active role in creating or contributing to their retirement account.
"I hear from people at retirement workshops that they enroll and never look at it again," she said. "So, it could be that the auto-allocation is 3% and they never touch it again."
In these cases, she said retirement account holders may not even realize they're missing the mark because they're disassociated from the process entirely.
"People have told me they assumed their employer knows best—meaning they thought the auto-allocation would be adjusted at their employer's discretion—so they just never checked in on it," Marion said. "But no one else going to make sure you're ready for retirement; that's up to you."
I'll do it tomorrow-itis
"Baby Boomers and Gen X specifically are prone to not prioritizing retirement savings," said Marion, adding that these generations prioritize other savings and investing goals while leaving retirement until late in the game.
"People think they have time to double down at the end," said Marion. "But they don't."
She said factors outside of one's control make waiting until the last minute a bad idea. "You don't know if you'll have a health emergency. You don't know if your company is going to go out of business unexpectedly. You just don't know," she said.
Getting on track
Step one is taking a realistic look at what retirement looks like for you. Maybe you want to travel the world, or maybe you want to sell your house and move closer to family—all of these factors should be accounted for.
Then crunch the numbers. "Do you have retirement accounts at past jobs? Did you work somewhere with a pension? Have you looked at your actual Social Security numbers recently?" Marion said. "Input all of this information, and use an online calculator if you need to, to determine your 'enough.'"
Some people get discouraged when they realize how far off the mark they are, she said.
"So, don't panic. Work up to it," she said. "Start by giving yourself a 1% raise in your allocation. That's minor enough you may not feel it much in your take-home [pay], but it will make a difference. And do that every year."
Getting caught up might also involve sitting down with a financial advisor and committing to yearly reviews of your retirement account—to ensure you're staying engaged and on track.
"Remember when setting your retirement saving goal, to prepare for all contingencies," she said. "Factor in additional time and expense, consider inflation and taxes. Really give yourself a cushion because, honestly, no one has ever retired and wished they'd saved less money.
"You can absolutely take steps now to get back on track. Your retired self will thank you for it."