Retirement Savings Easier Said Than Done

Ameriprise Financial has released a report that quantifies what this blog suggested in our initial post - there is a disconnect between the desire to save more for retirement and the reality of doing so. Simply put, most people do have the desire to save for the long-term, but meeting short-term needs tends to take priority. The Ameriprise study focused on three demographic groups - Baby Boomers, Gen X, and Millenials. Here are some of the more interesting findings:

• Roughly three in five have cut back on discretionary spending such as dining out, entertainment, and clothing/shoes in order to save more.
• One in four have cut back on bigger ticket items such as mortgage/rent and college education expenses; one in two have seen big savings by cutting back on vacations.
• Four out of five individuals with student or business loans feel financially stretched.
• While Boomers consider themselves to be savers more so than does either GenX or Millenials, the Boomers have tended to cut back less on spending than the other two groups.
• A surprising three in five Boomers aren't too concerned about how much of an inheritance they will leave.
• Millenials have tended to cut back more than the other two groups on big ticket items, but they also feel extremely stretched financially. About seven in ten have either reduced contributions or thought about doing so.

While the study's conclusion that today's trade-offs will boost future financial goals is true enough, I think the one additional focus that is needed is helping people better navigate the current challenges, especially when they do get in the way.