‘America’s retirement score’ drops: Savers only have 78% of income needed

Fidelity Investments is the latest financial services firm to raise warning flags over the state of readiness when it comes to saving for retirement. In its recently released Retirement Savings Assessment, Fidelity surveyed working Americans and found that there has been a decline in retirement readiness, possibly linked to concerns about inflation and recession. The report scored the financial preparedness of American household and found a five-point decline from the all-time high score of 83, reached in 2020. For the 2023 analysis, the retirement score had moved to 78—indicating that American households had on average 78% of the income needed to cover expenses during retirement.

As with other recent studies, the results may be a reflection of turbulent economic times. With the stock market becoming more volatile, the report said that more conservative investors have become worried about losing their savings by investing too aggressively. This was especially true of millennials, the survey found. From the data, Fidelity reported that millennials saw the biggest declines in preparedness, with decreasing savings rates and a more cautious and conservative approach to investing. “American savers continue to navigate through uncertainty, and as a result, may consider pulling back on saving for the future,” said Rita Assaf, vice president of retirement at Fidelity Investments. “When it comes to long-term investing, staying focused on your individual goals is critical. Having a plan in place is one solid way to help weather any storm, as we’ve seen the last few years and weeks with the pandemic, inflation, and market volatility.”