Financial Stress By: John Hancock Retirement Services

Falling behind with retirement savings

The number one financial worry, year over year, is saving for retirement (again, except for among people with student loan debt). The unknown is always worrisome, and as retirement stretches out with increasing longevity, there’s a lot more unknown to plan for.

We see a setback this year in how financially prepared people are for retirement. Less than half of participants say they’re on track or ahead of schedule in saving for retirement, with 51% saying they’re behind schedule (and 5% unsure). Participants who say they’re not knowledgeable about retirement savings strategies are much more likely to be behind (72%) than people who consider themselves knowledgeable.

Likewise, fewer people expect to retire when they’d planned or earlier than planned, with more expecting to have to delay retirement. And for the first time in our survey, the expected retirement age has gone up, from 60 to 64 years old to 65 to 69.

 When do you think you'll retire?

Earlier than planned  3% 
About when planned   36%
 Later than planned 31% 
Don't plan to retire  4%
Unsure  25%

Unfortunately, people are delaying retirement out of necessity, not choice. Affordability is the number one driver of timing, both for those who retire early (because they can afford to) and those who delay retirement (because they can’t afford to), far ahead of job-related or social reasons.

Reasons participants expect to delay retirement

Can't afford to retire  78% 
 Desire to build up more savings before retiring  65%
 don't want to lose employee benefits


An unexpected expense   27%
 Enjoy their job  20%
 Need for mental stimulation  17%
 Enjoy socializing with co-workers  11%
 Self-work is tied to their career  10%

There’s a strong link between financial knowledge and retirement readiness

There is some good news when it comes to saving for retirement. Almost half of participants (48%) have increased their contributions in the last two years, motivated by either a raise or bonus or a desire to meet the employer match. Only 8% have decreased their contributions, with paying off debt or saving for something else being the top reasons for taking that action.

But there’s a good deal of uncertainty when it comes to knowing how much they’ll actually need in retirement. Fifteen percent of participants say they’re unsure, and about the same amount think they’ll need to replace less than 50% of their income in retirement, which for most people is likely not enough.


There’s also a persistent gap between what people think they should be saving for retirement and what they’re actually saving. Most people understand they should be saving more than 5%, and eight in ten think they should save more than 10% of their income for retirement. Unfortunately, 10% aren’t saving at all, and 25% are only saving between 1% and 5%—and this is among people who are offered a retirement plan at work.

  Should be saving Currently Saving
Not Saving 
 1%-5%    25%
 6%-10%  17% 30% 
 11%-15%  27% 17% 
 16%-29%  24% 13% 
 >30%%  18% 5% 
 Not sure  11%  —

When it comes to choosing a contribution level, participants say they’re generally guided by gut feelings as well as the company match. There are some super savers out there who are maxing out their contributions, but they’re in the minority.

Participants expressed having a hard time deciding how much to save because they don’t know how much they’ll need. When asked what would motivate them to save for retirement, the top answers were projections of retirement expenses and of their expected balance at retirement. Without this information, they don’t have context for how much they should be saving and whether they’re on track or falling short.

Among married participants, 60% have a spouse who’s saving in an employer sponsored retirement plan. Those with a spouse who’s also saving:

  • Earn more than $100,000
  • Have a very good to excellent financial situation
  • Work with a financial advisor

This means that 40% of married participants are actually saving for two, making the need to save more even more critical. So even though 18% of participants are super savers, even they may not be saving enough for two.

When we ask participants what’s keeping them from saving more for retirement, the top three reasons are poor spending habits, credit card debt, and other debt, underscoring the need for basic financial literacy education. Budgeting, debt management, and credit card management strategies can help with the biggest obstacles to saving for retirement.

With so much uncertainty, very few (13%) have a written plan for retirement. Those most likely to have a written financial plan for retirement, in order of likelihood:

  1. Are very knowledgeable about retirement savings strategies
  2. Work with a financial advisor
  3. Have a very good or excellent financial situation
  4. Have low financial stress
  5. Are baby boomers
  6. Have a household income greater than $100,000 

People who are knowledgeable about retirement savings strategies are also much more likely to be ahead or on track with their retirement savings. Most people without that knowledge are behind in saving for retirement.


These factors all indicate that income isn’t the biggest driver of retirement readiness—knowledge and advice arm people with what they need to prepare for retirement.


Participants are looking for help understanding their expected retirement expenses, with their top retirement worries being:

  • Healthcare expenses
  • Social Security and Medicare
  • Availability of healthcare
  • Downturn in the economy
  • Inflation

Retirement expense worries are focused on the basics:

38%—Medical expenses
38%—Living paycheck to paycheck
30%—Monthly housing expenses

A combination of increased longevity and the need to work beyond the retirement age has changed people’s perceptions of retirement. An increasing number of participants see retirement as a gradual decrease in work hours, rather than an abrupt change from 40-plus hours a week to nothing.

Adding to the uncertainty are a wide range of financial considerations for retirement, with these concerns top of mind for a majority of participants over age 50:

The value of advice

Almost two-thirds of participants would find it helpful to get investment advice.

  • 46% use their own discretion in choosing their investments
  • 26% use a broker/advisor
  • 23% don’t pay attention to their retirement investments
  • 16% use online tools
John Hancock Retirement Services
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