US retirement confidence rises, but some groups less upbeat

Retirement confidence is on the upswing among Americans overall, but the rising tide hasn’t lifted all boats as some demographic groups report less optimism, according to new research from BlackRock.

BlackRock’s ninth annual Read on Retirement survey found that 68 percent of savers with workplace retirement plans feel they are on track with their savings, a 12 percent increase from last year, driven in part by improved market conditions.

Still, roughly two-fifths of these savers remain unsure whether they’ve saved enough (41 percent) or how much retirement income they’ll need in the future (43 percent), indicating a need for better planning tools and solutions.

Those who aren’t in a workplace savings plan are even more in the dark, BlackRock said. In a disappointing replay of findings from the previous two years, only 47 percent of that group reported feeling on track for retirement.

Employers are also growing increasingly concerned about employee retirement preparedness. Only 58 percent of plan sponsors this year believe their participants are on track with savings, down from 64 percent in 2023. Almost three-quarters (72 percent) see a significant risk of their employees outliving their savings, and nearly all (99 percent) feel obligated to help.

“Confidence in retirement has varied for the last nine years—and while we have seen increases when markets are up—when we look at sentiment broken out by gender, generation, and access to a retirement savings plan, it tells a complicated story,” Rob Crothers, head of US retirement at BlackRock, said in a statement.

In yet another display of the stubborn financial gender gap, only 59 percent of women BlackRock surveyed feel on track for retirement compared to 75 percent of men. Seventy percent of women said they find it challenging to understand how savings will convert to monthly income, versus 56 percent of men, and 65 percent of women worry about depleting their savings before they pass away compared to 57 percent of men.

Slicing the data by generation, the survey revealed Gen Z as the most confident cohort, with 77 percent believing they are on track for their desired retirement lifestyle. And while 69 percent worry about exhausting their nest eggs and 63 percent don’t understand how they should manage their retirement investments, 47 percent of Gen Z respondents work with financial advisors, mostly through their employers.

As the oldest millennials enter their midlife phase, they’re grappling with significant planning challenges. Aside from balancing short- and long-term savings goals, 56 percent are concerned about outliving their savings, while 62 percent are saddled with credit card debt – the most out of all generations surveyed.

Gen X is the least confident, with only 60 percent feeling on track for retirement and 63 percent worried about outliving their savings. While more than half believe they should save more, only 31 percent of those eligible actually make catch-up contributions, and just 40 percent of Gen Xers overall said they use financial advisors.

As for the Boomer generation, which is straddling the retirement line, 68 percent of those still working feel on track to retire, though uncertainties about savings amounts (58 percent) and income needs (51 percent) persist. Among retired Boomers, 85 percent report that secure income is more critical than anticipated, and 94 percent believe employers should prioritize providing secure income options.

“The journey to retirement is personal, but the challenges are shared,” said Anne Ackerley, senior advisor on retirement at BlackRock. “Our research continues to underscore how complicated the path is for Americans when planning for retirement.”