As we struggle to save for retirement, one common obstacle blocks the way, regardless of our age: debt.
Almost half of working Americans — 49% — agree with the statement “Debt is interfering with my ability to save for retirement,” according to a recent survey by the Transamerica Center for Retirement Studies.
That includes 20% who “strongly agree” and 29% who “somewhat agree.”
Broken down by demographic groups, the percentages who strongly or somewhat agree with the statement are:
- Generation Z: 51%
- Millennials: 57%
- Generation X: 51%
- Baby boomers: 32%
The center says it’s of concern that 24% of millennials, 22% of Generation X and 19% of Generation Z “strongly agree” with the statement.
Worries about debt haunt Americans across the age span.
For example, among members of Generation Z — which Transamerica defines as those born from 1997 to 2012 — roughly equal percentages say their financial priorities are paying off student debt (35%) and saving for retirement (33%).
Meanwhile, among members of Generation X — born from 1965 to 1980 — 65% say they are focused on paying down debt, while the same percentage also make saving for retirement a priority.
Overall, 62% of workers say paying off at least one form of debt is a financial priority, while 59% list saving for retirement as a priority.
When it comes to having to decide between paying off debts or saving for retirement, it appears the former is more likely to win.
Among those who have taken a loan from their 401(k) or similar plan, paying off debt is the most frequently cited reason, with 41% of respondents citing that reason. That includes credit card debt (32%) and/or other debt (19%).
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