Debt is limiting American retirement savings

MINNEAPOLIS – Dec. 2, 2024  – The majority of Americans are working toward paying off debt and many worry that their debt will affect their financial future, according to the 2024 Annual Retirement Study from Allianz Life.

The majority of Americans, 55%, say that they are currently working toward paying off debt to meet their long-term financial goals. Gen X, especially, has this as a priority. About two in three Gen Xers (64%) say they are working toward paying off debt, compared to 54% of millennials and 54% of boomers.

Many say that debt has hindered their retirement savings. Among Americans who wish they would have saved more for retirement, 46% say non-housing debt from car loans, credit cards and student loans are keeping them from additional saving. In particular, millennials (56%) more than Gen Xers (50%) or boomers (35%) feel that non-housing debt is limiting their retirement savings.

Housing debt is also significantly affecting Americans’ ability to save for retirement. More than one in three Americans (34%) who wish they would have saved more say that housing debt is keeping them from saving for retirement. Gen Xers (39%) more than millennials (33%) and boomers (34%) feel this way.

“Debt can have a significant impact on achieving long-term financial goals like retirement,” said Kelly LaVigne, VP of consumer insights, Allianz Life. “It is important to find a balance between paying off debt and saving for your financial future. Limiting retirement saving because of debt can leave you vulnerable to outliving savings in retirement.”

Balancing financial priorities

Americans feel like they have too many financial goals such as saving for retirement, their children’s education and paying off debt. The majority (62%) of Americans say they are balancing so many financial goals that it’s hard to focus and prioritize. More millennials (73%) than Gen Xers (50%) or boomers (25%) feel this way.

Four in 10 (40%) Americans worry that their existing debt with impact their future quality of life. More millennials (53%) have this worry than Gen Xers (44%) or boomers (18%). Hispanic Americans (53%) worry more than Black/African American (48%), white (40%) and Asian/Asian American respondents (39%) about their existing debt affecting their future quality of life.

Yet just 14% of Americans with a financial professional have discussed this worry with them.

“For all financial goals, it’s important to have a written plan of how you will achieve them,” said LaVigne. “A financial professional can help you create that plan to balance paying off debt while saving for your financial future.”

 

*Allianz Life conducted the 2024 Annual Retirement Study online survey in February and March 2024 with a nationally representative sample of 1,000 individuals age 25+ in the contiguous U.S. with an annual household income of $50k+ (single) / $75k+ (married/partnered) OR investable assets of $150k+. The study included an oversample of respondents who identified as Black/African American (416 responses); Hispanic (398 responses); Asian/Asian American (366 responses).