(Bloomberg) -- For younger generations in the US, it’s difficult to imagine retiring.
Roughly 21% of Americans ages 22 to 34 said retirement is out of reach, or not part of their plan, in a recent TIAA Institute survey. And it’s not hard to see why.
Good entry-level jobs are getting harder to come by, student debt burdens are daunting and the cost of living is high. Videos on TikTok detail a so-called “silent recession,” or even a “silent depression,” as millions juggle increased costs on everything from auto insurance and food to rent and utilities. And when struggling with short-term financial pressures, focus on a far-off retirement goal can take a backseat.
“If you ask younger generations what financial actions they’ve taken over the past year, many made attempts to remove some debt and improve their credit score, and that comes at expense of saving for retirement,” said Surya Kolluri, head of the TIAA Institute.
The research organization’s report, released Thursday, detailed a downbeat attitude among many young Americans. Almost two-thirds said they don’t believe they have access to the same opportunities as everyone else. Only 27% agreed that they live in a fair and just society.
One opportunity many young Americans don’t feel will be there for them is the ability to rely on Social Security. Fewer than half of younger generations considered income from Social Security as a way to fund retirement, compared with 64% of those surveyed who plan to retire, and 73% of retirees.
Younger generations instead plan to rely more heavily on retirement accounts such as 401(k)s. Many workers in the gig economy, however, lack access to 401(k)s, and instead fund IRAs. But while the IRS annual contribution limit for 401(k) contributions is $23,000 — and companies often match some part of that contribution — the IRA limit is far lower, at $7,000 for a traditional IRA.
While more than two out of five of all respondents cited being unable to save as the reason why they don’t plan to retire, 13% wanted to avoid boredom, 10% cited career enjoyment and 7% were concerned about feeling a lack of purpose.
The survey of 1,684 adults between the ages of 18 and 75 was fielded from May 19 to June 11 by Ipsos.
To contact the author of this story:
Suzanne Woolley in New York at [email protected]