Cost of Living, Debt and 2 More Threats to Your Retirement Savings
Many Americans say they’re trying to save for retirement but feel like they’re falling behind. In a Transamerica Center for Retirement Studies report, 62% of workers said they could reach retirement age and still not have enough put away to meet their needs — or, if already retired, that they were unable to save enough to meet their retirement needs.
The biggest obstacles cited are consistent, but there are ways to move past them. Here are the four most common headwinds that can slow retirement saving progress — and practical ways to start pushing back.
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High Cost of Living: Why Contributions Stall
Nearly 8 in 10 non-retired Americans agree with the statement, "Today's high cost of living is making it harder for me to save for retirement."
When everyday expenses rise, retirement savings often take a backseat. But even small contributions can help maintain momentum over time.
"Saving for retirement is a long-term journey," said Catherine Collinson, founding CEO and president of the Transamerica Institute. "It is important to save as much as you can as consistently as possible, knowing that you can contribute more during prosperous times and pull back during lean years. Just keep saving — and avoid tapping into those savings before retirement."
Consider automating contributions so saving happens consistently and increase savings by small increments when possible.
Retirement Investing Gaps: Where Knowledge Matters
The report found that 64% of non-retired Americans feel that they do not know as much as they should about retirement investing. That uncertainty can lead to costly decisions.
"Knowledge is power — and a lack of knowledge can lead to suboptimal decision-making and costly mistakes, such as investing too conservatively, taking excessive risks or missing out on employer benefits," Collinson said. "Over time, even small missteps can have a major impact on one’s retirement security."
Improving your understanding doesn’t have to be overwhelming. Learning just a few fundamentals can make a meaningful difference.
"A great starting point is learning about asset allocation principles based on your risk profile and years to retirement," Collinson said. "Conceptually, this boils down to understanding how much to invest in growth‑oriented assets relative to more conservative ones as you age."
Many 401(k) and IRA providers offer professionally managed services, like target date funds, model portfolios and managed accounts, that can do the heavy lifting for you.
"However, it’s still critical that you learn enough about these services so that you can ask good questions and make informed decisions," Collinson said.
Limited Income: Finding Room To Save
Many Americans believe that they do not earn enough to set aside money for retirement: 57% agree with the statement, "I don't have enough income to save for retirement."
When income feels stretched, saving can seem out of reach — but a closer look at spending habits can sometimes reveal opportunities.
"Our research finds that many Americans are not yet engaging in financial activities like budgeting," Collinson said. "By becoming financially savvy and knowing your expenses relative to your income, you may find opportunities to cut costs, stretch your dollars and save more."
Track spending to identify small savings opportunities and redirect even modest savings toward retirement accounts
Debt Burden: How To Balance Priorities
More than half of non-retired Americans (54%) said that having debt is interfering with their ability to save for retirement. However, the right strategy depends on the type of debt you’re carrying.
"For those with high-interest-rate credit card debt, paying it off should be a top priority because it can easily spiral out of control," Collinson said. "For those with lower-interest, structured debt, be sure to crunch the numbers to determine the best strategy. You may be able to pay it off while still saving for retirement and other goals."
Aim to create a plan that supports both short-term stability and long-term goals.
While there are real challenges to saving for retirement in today’s economy, consistent habits can help make progress possible. Taking small, steady steps — combined with informed decisions and avoiding setbacks like early withdrawals — can add up over time. Starting with just one change now can help put long-term financial security within reach.
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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