Summary
After paying off the monthly bills, credit card debt is the biggest reason Americans don’t save for retirement
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Schwab Retirement Plan Services surveyed 500 U.S. employees who were not saving in their company’s 401(k) and found 45 percent say they either have no money remaining or are actually behind on bills at the end of each month.
Paying basic monthly expenses was the most common obstacle to putting savings in a retirement plan, cited by 46 percent of the nonsavers. But almost as prominent, at 42 percent, was the savings hindrance of paying off credit card debt.
Less-predictable financial burdens – such as covering an unexpected expense such as a home or car repair, or paying medical bills – played a role in about a third of the respondents’ inability to save with their 401(k).
When asked what one thing they would change about how they’ve handled their finances in the past, more than a quarter of the 401(k) nonsavers (26 percent) said they would have accumulated less debt.
Schwab’s survey focused on U.S. workers, ages 25-70, who were eligible for a workplace 401(k) plan at companies with at least 25 employees. The online interviews were conducted in June, with findings released Aug. 15.
See related: 8 steps to reduce your credit card debt, Charged Up! podcast: Get the 411 on your 401(k), More infographics
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