💭 Yes, no, maybe so?

01.11.2024

Saving enough for retirement?

If you’re uncertain, now’s a good time for another New Year’s resolution. But with the average pledge lasting just 3.74 months,* a little motivation might be needed.

Only 11% of Americans with a retirement plan feel like they’re saving enough, and more than half (61%) wish they had started saving earlier. Still, more than two-thirds (68%) believe they’ll be financially ready for retirement, according to new research from Empower.

“Yes, no, or maybe so” depends on your personal situation and goals. Check out the study findings and this week’s headlines to dive into how Americans are contemplating retirement.

— The Editors

Money

🤑 Cha-ching, add up that passive income: Steve Ballmer – former CEO of Microsoft – is expected to earn approximately $1 billion in dividend income* from his shares of Microsoft stock. Most people won’t ever see that kind of passive income, but of those with a retirement plan, 66% have or plan to seek alternate income streams to counter inflation.  

🚀 The Magnificent 7 lead the way: In 2023, seven companies known as the Magnificent 7 – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla – accounted for close to two-thirds of the 24% gains in the S&P 500.* The Nasdaq was also up 43%. Despite these stellar market gains, 77% of Americans with retirement plans are worried about market volatility

🏡 Home ownership, slip, slip, slipping away: Sixty-six percent of individuals with a retirement plan are concerned about an inflated housing market. High interest rates and home prices made 2023 the least affordable housing market since 2013. Redfin estimated only 15.5% of homes were affordable* in 2023 for the typical household – down from 20.7% in 2022. 

💧 A tall drink of water: Staying hydrated has never been more trendy, thanks in part to the resilience of the Stanley Quencher, a reusable water bottle that flooded the brand’s annual sales to $750 million* in 2023. Its recent Valentine’s Day limited edition sold out within minutes and is being resold on some sites for up to $300.* The reusable tumbler market size is estimated to reach $11.5 billion by 2030.*

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 ✅ Sticking to it: Have you already broken your New Year’s resolutions? 

  • Yes 

  • No 

  • Maybe so 

We hope not all of them! Last issue’s poll revealed nearly 60% said saving up for the year ahead is their number one financial resolution.

___

Work

A $500K goodie bag 

The gift bag for Hollywood’s Golden Globes rang in at a $500K value.* Due to tax codes, celebrities could be on the hook to pay 37% of the price of its contents (like face cream, a private jet membership, and tattoo session) should they choose to redeem the offers, according to some estimates.

Speaking of taxes, the taxable wage base for Social Security is going up to $168,600 in 2024,* from $160,200. In return for paying into Social Security, workers claim benefit payments at retirement based on several factors. However, many Americans aren’t sure if Social Security will be there when they retire, and 24% of workers don’t expect to collect anything from Social Security.

Life

Kids come first

Empower research shows that 2 in 5 parents with adult children aged 20 or older currently support them financially, and more than half (53%) are dipping into their retirement savings to do so. Almost half (49%) say they live with their children to help manage expenses.  

U.S. parents are spending an estimated $500 billion* every year on their 18- to 34-year-old children – double what they’re putting toward their retirement. That may help explain why 51% of Gen Xers feel like they’ll have to delay retirement or not be able to retire at all.

Nearly 6 in 10 parents regret not having more money conversations with their children while they were growing up (57%) and say that they wish they would have made financial literacy (60%) a priority.

Play

Retire early? Yes, please! 

Gen Zers just entering the workforce are quickly planning their exits: 17% of Gen Zers with a retirement plan say retiring before the age of 50 is a top goal and 13% expect to retire earlier than planned. Early retirement could be a challenge, with only 28% of Gen Zers prioritizing saving for retirement.

Working with a financial professional can help you get started and stay on track. Eighty-five percent of respondents working with an advisor feel confident about their retirement readiness, while only 57% without an advisor feel the same way.

Get the scoop on your money.

Stay current on planning, saving, and investing for life.

As of January 8, 2024, EAG holds shares of Alphabet Inc. Class A (GOOGL), Amazon.com, Inc. (AMZN), Apple Inc. (AAPL), Meta Platforms Inc. (META), Microsoft Corp (MSFT), Nvidia Corp (NVDA), and Tesla Inc. (TSLA) in advisory client accounts and does not hold Stanley Black & Decker, Inc. (SWK) and Redfin Corp (RDFN).

*Third-party data is obtained from sources believed to be reliable; however, Empower cannot guarantee the accuracy, timeliness, completeness, or fitness of this data for any particular purpose. Third-party links are provided solely as a convenience and do not imply an affiliation, endorsement, responsibility, or approval by Empower of the contents on such third-party websites.

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The Currency editors

Staff contributors

The CurrencyTM, a publication from Empower, covers the latest financial news and views shaping how we live, work, and play. We keep you current on ways to plan, save, and invest for life.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. No part of this blog, nor the links contained therein is a solicitation or offer to sell securities. Compensation for freelance contributions not to exceed $1,250. Third-party data is obtained from sources believed to be reliable; however, Empower cannot guarantee the accuracy, timeliness, completeness or fitness of this data for any particular purpose. Third-party links are provided solely as a convenience and do not imply an affiliation, endorsement or approval by Empower of the contents on such third-party websites. 

Certain sections of this blog may contain forward-looking statements that are based on our reasonable expectations, estimates, projections and assumptions. Past performance is not a guarantee of future return, nor is it indicative of future performance. Investing involves risk. The value of your investment will fluctuate and you may lose money. 

Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements. 

Advisory services are provided for a fee by Empower Advisory Group, LLC (“EAG”). EAG is a registered investment adviser with the Securities and Exchange Commission (“SEC”) and subsidiary of Empower Annuity Insurance Company of America. Registration does not imply a certain level of skill or training.