Saving and Investing for Retirement in the United States: Knowledge, Perceptions, and Trust

Public perceptions of and trust in retirement planning instruments significantly affect people’s behaviors and ultimately their retirement readiness. In light of aging populations and extended lifespans, planning for retirement is more imperative than ever. Utilizing a nationally representative sample of the US population (n = 870), we study public views around retirement options, confidence in financial decisions, and retirement planning satisfaction levels. Lastly, we assess how knowledge about investing is associated with retirement decision-making. Overall confidence in retirement preparedness is low: 24% of our sample reported not being confident about knowing how to save for retirement. Moreover, respondents rated trust in bank savings on par with 401(k) accounts as saving for retirement vehicles. Individuals who self-reported low investment knowledge more often reported forgoing saving for retirement entirely, while those with high investment knowledge tend to diversify their portfolios across both formal (e.g., 401(k) plans, pensions) and informal (e.g., real estate, personal savings) vehicles. These findings highlight the critical need for improved retirement education and planning strategies to assist with decision making that will enhance preparations for retirement.