Combatting the Retirement Savings Gap with Financial Wellness

Experts across the United States are increasingly worried that people’s savings and investments won’t be enough to last through retirement. Financial wellness holds the keys to a long and prosperous retirement, but you must know how to achieve it. But what is financial wellness? How easily can you attain it, and how might best practices differ depending on your age?

Understanding the Potential Retirement Crisis

Americans are facing a multi-faceted retirement and savings crisis that has many experts worried. Those on the verge of retirement may not have enough between their savings and Social Security income to last the next 20–25 years.

Older couple looking at retirement account with satisfaction

Meanwhile, younger generations (Gen Z and millennials) actively saving for retirement feel like they’re fighting an uphill battle. With higher living costs than ever, it’s hard to siphon money away from their paychecks and into a retirement account.

For example, consider those born in the 1980s who graduated college during the 2008 recession. They’re worth 34% less than they would have been had the Great Recession never happened.

Over the past couple of years, rising interest rates and subpar market returns have made saving for retirement more challenging. Though it’s easy to blame the COVID-19 pandemic, it more likely exposed what proved to be challenges to retirement savings for over a generation. We’re living longer, healthcare costs are rising, and, until recently, wage increases were not keeping up with the rising cost of living. The result of facing these challenges is a society that, for the most part, is incapable of saving enough for retirement.

So, how do we right the ship toward more stable retirement savings? Financial wellness is the solution.

What Is Financial Wellness?

Financial wellness is a holistic approach to managing your finances beyond basic budgeting. It involves assessing your current financial situation, understanding what you need to do to reach your financial goals, and making the necessary changes and decisions to achieve them.

Financial wellness also means having the knowledge and resources to make informed financial decisions.

For example, it’s important to understand how credit works, know when and how to invest, and avoid scams or predatory lenders. Financial wellness requires you to actively manage your money to live comfortably now and in the future.

There are four key principles of financial wellness:

  1. Budgeting: Create and stick to a budget to set the foundation for your financial well-being. Think of it like a roadmap to manage your daily, weekly, monthly, and yearly expenses. As long as you follow the map, you’ll stay on the road toward a financially secure future.
  2. Debt: In the current retirement crisis, long-term and consumer debt are two of the most significant obstacles preventing people from saving and investing. Debt management boosts your credit score, opening doors to better borrowing rates, home and auto loans, and credit limits.
  3. Savings and Investments: Short-term savings and investments can provide the money you need for immediate big-ticket expenses, such as home repairs, vacations, and large purchases. Ideally, you don’t take on more debt to cover these expenses. Meanwhile, long-term savings and investments actively fund your retirement plan.
  4. Protection and Insurance: Anything can happen at any time. An emergency fund and robust insurance plans will prevent an accident or illness from derailing your financial situation.

Financial Wellness at Every Life Stage

There’s no one-size-fits-all financial wellness strategy.  Different generations are at unique stages in their life. They have various financial goals and obligations and must mold their wellness strategy accordingly.

Happy client talking with advisor

Gen Z and Millennials

Compared to their parents, millennials have more time to prepare for retirement. However, studies show they’re concerned about where the money will come from.

For millennials, debt is a particular concern. They’re America’s poorest generation and are continuing to amass debt. In fact, one study shows 72% of millennials have debt that isn’t tied to a mortgage, and the average amount owed is a whopping $117,000.

They’re also more pessimistic about their financial future, with 6% saying they may not ever be able to pay off their debt.

Gen Z finds themselves in a better financial wellness position due to their aversion to student loans and preference of on-the-job training. While Gen Z faces a heightened cost of living, they’re focused on saving for financial independence. As such, they’re rethinking how they make and spend money.

Gen X

Also known as the “sandwich” generation, Gen Xers deal with multiple financial priorities. Most are married with minor children, and as of 2020, nearly 70% of them own a home.

Some Gen Xers currently repay their student loans while saving to send their kids to college. They’re also caught between raising their children and caring for their aging parents.

Gen X carries the most debt among all generations, with mortgages, student loans, and credit cards being the top three debt sources. Their financial wellness goals must include paying down debt—especially high-interest credit card debt—to save more for retirement.

For some older Gen Xers, retirement might be right around the corner. They long for a financial roadmap with proven strategies they can enact right now.

Baby Boomers and the Silent Generation

Baby boomers are also concerned with planning for retirement, protecting their wealth, and getting out of debt. While boomers are more prepared for retirement than younger generations, one study found 45% of baby boomers have no retirement savings.

Couple happily viewing retirement accounts

Time is their biggest obstacle, as most are in the pre-retirement phase. Meanwhile, some older boomers have put retirement off.

According to the Federal Reserve, boomers control 50% of total U.S. wealth—more than any generation (even though millennials outnumber them). However, how that wealth distributes among boomers is a different conversation.

According to one study, 20% of boomers have less than $5,000 in personal savings. They’d be grossly underprepared if something significant happened, like an accident, natural disaster, or serious illness.

As for the Silent Generation (born between 1928 and 1945), their primary goal is to make their retirement savings last. As of 2023, the youngest of the Silent Generation would be 78 years old. They’ve likely retired already but have mounting healthcare costs to consider.

How Financial Wellness Helps Close the Retirement Savings Gap

Financial wellness aims to bolster your long-term savings by leveraging short-term solutions. For example, setting a budget and chipping away at debt today will have windfall effects later in life. You’ll be able to save and invest more money, leaving a larger nest egg for retirement.

Young couple getting ahead on retirement savings

Many people are actively juggling several financial goals at once. They’re paying off debt, buying a house, starting a family, and caring for an aging loved one—all while trying to save for the future. Ultimately, financial wellness is about balancing today’s demands with long-term retirement goals.

Remember the four keys to financial wellness: budgeting, debt, savings, and insurance. Find ways to adjust the sliders in each category to live comfortably while saving for retirement. Don’t hesitate to lean on a trusted financial partner for guidance.

The Importance of Finding Timely Financial Guidance

Nobody said you have to close the retirement gap on your own. According to a Deloitte survey, many Americans lack confidence in their own financial literacy about retirement savings. These findings were especially true among younger generations.

Regardless of age, seeking advice from trusted financial sources to get the most out of your financial wellness strategy is crucial.


A sound financial planner will identify critical areas where you can change your behavior to save more money. They’ll walk you through how much you should be saving (and have saved) for retirement and which investment vehicles are best for your needs (401(k) IRA, Roth IRA). They can also look at your current mortgage and determine if it’s better to refinance or continue paying it off.

The best financial partners will keep digging to uncover more savings. They’ll help you determine how much you should have saved in an emergency fund and will find unique ways to lower your tax liabilities each quarter.

Secure Financial Wellness With a Trusted Partner

With the retirement savings gap widening by the day, taking proactive measures to strengthen your retirement plan is more important than ever. Financial wellness holds the keys to a long and prosperous retirement, but you must know how to achieve it.

Whether you’re young and starting your career or nearing the end of your working years, there’s no better time to seek guidance from a trusted financial partner like Citywide Banks, a division of HTLF Bank.

Get in touch with Citywide Banks, a division of HTLF Bank today to speak with an expert banker regarding your retirement plan. Together, you can explore ways to leverage financial wellness and meet your retirement goals.

This material has been prepared for informational purposes only, and is not intended to provide and should not be relied on for investment, legal or tax advice. Products offered through Wealth Management are not FDIC Insured, are not bank guaranteed and may lose value.

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