Thanks to
Wall Street megabank Goldman Sachs' 2023 edition of the Retirement Survey & Insights Report, which it published Tuesday, found that 52% of respondents said they had grown their retirement savings over the past year — a big uptick from last year's market doldrums, when only 36% had said so. Retirement saver stress also declined, with only 46% of respondents reporting stress about their retirement in 2023, compared with 58% who did so last year.
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However, what Goldman terms the "financial vortex" of competing financial responsibilities for savers has "worsened," the firm said in a press release Tuesday. These stressors include the repayment of
"Over the long term, financial vortex challenges could reduce U.S. employee retirement savings by up to 37%," the firm said in the press release — referring to the impact of such setbacks when combined. On the whole, while only 31% of retired respondents said they had experienced a financial hardship that made them stop saving for retirement, 42% of working respondents reported such hardships, meaning rockier roads lie ahead for today's retirement saver compared with yesterday's.
In particular, the amount of respondents who quit their jobs to provide caregiving doubled over last year. While in 2022 only 10% said they had switched from a full-time job to a part-time one to provide caregiving, that figure was up to 22% in 2023. And while only 22%
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"The new reality for retirement savers is that they're going to have to figure out how to balance some of these real life impacts, more than they've had to do so in the past," said Chris Ceder, the senior retirement strategist in the Asset Management Division at Goldman Sachs, in a press call on the findings.
Yet traditional retirement plans have often assumed the absence of these potential issues, Ceder said, although he noted that
Employers have been responding to the so-called financial vortex problem by increasing their
"More and more they're offering voluntary, ancillary plans that will assist with childcare, general family care, which is a huge distraction for many employers," Barber said. Advisors can help clients plan for those drags on retirement by encouraging them to select employers with benefits that can address such obstacles.
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The study polled 5,261 Americans in July 2023, including 3,673 employed individuals, who ranged in ages from in their 20s to over 70, and 1,588 retirees aged 50-75. The study was conducted by Goldman Sachs Asset Management and Qualtrics Experience Management and included baby boomers, Generation X, millennials and Generation Z respondents.
