American workers are taking saving for their retirement much more seriously but despite this, they still may not be saving enough because more retirees are leaving the workforce earlier and, once retired, finding life to be much more expensive than they had expected.
Research by The Fidelity Research Institute has found that the typical American household is now on target to retire on around 58 per cent of its working income, an improvement of 1 per cent from the previous year.
Though slim progress, this still showed a "steady but slight improvement in the retirement readiness of American households", insisted Guy Patton, executive director at the research unit affiliated with mutual-fund Fidelity Investments.
But he added that there was still "a fair amount of work to do" to get into Americans into financial shape for their twilight years.
Americans had on average some $22,500 in total household-retirement savings, the study found.
Around two out of five said they had recently taken steps to position for retirement, including shifting their portfolios; beefing up contributions to workforce plans, taking advantage of employer matching contributions and consulting professional planners and advisers.
Even so, adjusting to living on 42 per cent less income while in retirement would still come as a shock to many.
This finding was "worrisome", said Patton, because more older Americans were also saying they were being forced into retirement earlier than planned, often for health reasons.
In addition, retirees were finding they wee spending more than they had anticipated.
About a third had expected their monthly expenses in retirement to stay the same and nearly half thought they would go down.
The reality, however, was starkly different. Two-thirds said their expenses went up or stayed the same.
Roughly two thirds of today's workers said they planned to hold some job during retirement to supplement their income, but, with health becoming a significant variable for many, this was something Americans needed to be wary of relying on, warned Patton.
The study found that that "generation X-ers", or workers between the ages of 25 and 42, were increasingly being sandwiched between caring for aging parents, raising their own children and saving for retirement.
About one in five working Generation X-ers currently provided or expected to provide financial support in the future to parents or in-laws.
The typical amount spent on aging parents was $3,500 annually, according to the study.
Yet only about a fifth of the age group had begun saving for retirement and the average total household-retirement savings was just $11,250. Only a quarter had a specific, documented retirement plan.
"We think individuals should plan for their own situations, which can vary depending on how they're going into retirement. It's more than just about money, but also health," said Patton.