Americans’ retirement readiness has deteriorated amid the market volatility seen over the last couple of years, according to a Fidelity Investments study released Tuesday.
The study, based on a survey conducted last August and September, shows America’s retirement score fell to 78 in 2022, down from the all-time high of 83 in the previous survey in 2020. That score means Americans saving for retirement have only 78% of the income they need to cover their costs in retirement.
The data suggest that more than half (52%) of the respondents would have to make modest to significant adjustments to their lifestyle in retirement if they don’t catch up on their retirement savings, while more than a third (34%) would have to make significant adjustments.
Fidelity links the deterioration to the market volatility and uncertainty, which it says caused individuals to save less and to invest their savings more conservatively.
Looking at the generational differences, millennials cut their savings rate by 0.2% and boomers cut theirs by 2.2%, but Gen Xers boosted their savings rate by 1.4%.
When it comes to asset allocations, overall, just 59.4% of respondents have asset allocations that are age-appropriate, down 0.6% from 2020.
“American savers continue to navigate through uncertainty, and as a result, may consider pulling back on saving for the future,” Rita Assaf, vice president of retirement at Fidelity Investments, said in a statement. “When it comes to long-term investing, staying focused on your individual goals is critical.”
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