Americans often don't save enough for retirement due to a lack of financial literacy and a tendency known as present bias. Additionally, certain retirement plan designs and reliance on Social Security influence saving behavior. One primary reason Americans don't save more for retirement is a lack of financial literacy. Many individuals are not saving enough or investing correctly for future retirement needs due to not understanding complex financial products and the difficulty in estimating exactly how much will be needed in retirement. Another key reason is present bias, which leads to a preference for immediate rewards over future benefits, causing procrastination and under-saving for retirement. Additionally, the design of retirement savings plans, such as the impact of default settings in 401K programs, can greatly influence saving behavior, as well as a reliance on Social Security, which may reduce the amount individuals save independently.
