58% of Americans socked away 9% of their annual income for retirement in 2024: Principal

There’s a significant disconnect between Americans’ confidence and knowledge when it comes to how they are saving for retirement and how they feel about their retirement readiness, according to new research from the Principal Financial Well-Being Index.

Despite the majority of individuals feeling confident in their understanding of how to save, most lack alignment with common industry recommendations that could help them feel more certain about their financial future. The key findings include:   

• Only 12% of employees know the 4% rule for retirement withdrawals.
• Two-thirds of employees (66%) say they need help making sure their retirement savings last their lifetime, and they’re going to their employer and financial professionals for that support.
• Only 24% of employers accurately know if they operate in a state that has a mandate for businesses to offer employees a retirement plan.

While there is a knowledge gap around best practices for saving and planning for income in retirement, two-thirds (66%) of employees recognize they need help. Nearly three-quarters (72%) of employees are comfortable getting retirement savings help from a financial professional, and 62% are comfortable receiving it from their employer. And, the benefits of increased participation and engagement can be significant considering eight-out-of-10 people say financial professionals provide confidence they’ve made the right decisions.