US retirement outlook has improved, but there’s a problem

investmentnews.com:

The retirement years of millions of Americans appear to be on a better course, but the reality may be less rosy according to Goldman Sachs Asset Management.

The firm’s Retirement Survey & Insights Report 2023 shows an improvement with 65% of the U.S. workers polled believing they are on course to achieve their retirement savings goals, up from 57% last year.

But the cost of living has added pressures on household budgets and, along with some other financial responsibilities, many people may be forced to delay or reshape their retirement plans, despite improved market and economic conditions.

Credit card debt, saving for college, and caring for (or financially supporting) loved ones creates a ‘financial vortex’ which, over the long term, could reduce retirement savings by 37%.

“While retirement sentiment improved over last year, the financial vortex remains a huge problem for many workers and retirees,” said Chris Ceder, senior retirement strategist at Goldman Sachs Asset Management. “Its challenges are largely immune to improvement in markets and the economy and will continue to impact new generations of retirement savers.”

Goldman Sachs’ research shows that just 36% of U.S. workers have three months of income saved for an emergency.

Many respondents to the survey were forced to make some tough choices.

The report found that 44% cashed-out retirement savings due to a job change, 42% stopped saving for their retirement due to financial planning (up 5 percentage points from 2022), 22% left the workforce to provide caregiving (almost double last year’s share), and 22% moved from full- to part-time work to provide caregiving (up from 10% in 2022).

Looking ahead, a fifth of poll participants believe their retirement will be