A new report from Allianz Life Insurance Company of North America reveals a majority of Americans are grappling with debt, which is significantly hindering their ability to save for retirement.
The 2024 Annual Retirement Study found that 55 percent of respondents are prioritizing debt repayment in order to meet their long-term financial goals, with Generation X leading the trend.
Around two-thirds (64 percent) of Gen Xers Allianz surveyed are working to pay off debt, compared to 54 percent of millennials and baby boomers.
Non-housing debt – such as car loans, credit cards, and student loans – is a key factor affecting retirement savings. Among those who regret not saving more for retirement, 46 percent cited non-housing debt as a barrier. Millennials, at 56 percent, are the most affected, compared to 50 percent of Gen Xers and 35 percent of boomers.
Housing-related debt also poses challenges. Among respondents who wish they'd saved more on hindsight, 34 percent said it has curtailed their ability to set aside funds for retirement. The feeling of regret was most pronounced among Gen Xers at 39 percent, while 33 percent of millennials and 34 percent of boomers share this concern.
“Debt can have a significant impact on achieving long-term financial goals like retirement,” Kelly LaVigne, vice president of consumer insights at Allianz Life, said in a statement announcing the findings. “It is important to find a balance between paying off debt and saving for your financial future.”
The survey also highlights a broader struggle with financial priorities. A three-fifths majority of respondents (62 percent) report feeling overwhelmed by competing goals such as retirement savings, paying off debt, and funding their children’s education. Millennials, at 73 percent, are the most likely to feel this strain, compared to 50 percent of Gen Xers and 25 percent of boomers.
Notably, 40 percent of Americans worry their debt will negatively impact their future quality of life, with millennials (53 percent) expressing the greatest concern. However, only 14 percent of respondents who work with a financial professional have discussed this issue with them.
“A financial professional can help you create a plan to balance paying off debt while saving for your financial future,” said LaVigne.
Americans now estimate they need $1.2 million to retire comfortably, but rising costs and debt are making that goal increasingly difficult to reach.
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