Putting money away for retirement is one of the most financially prudent moves people can, and should, take. Specialized savings products—like 401(k)s, IRAs and private pensions—can help consumers achieve financial independence once they hit retirement age. Despite that, Americans have a poor track record of actually utilizing these products.

A survey by the Employee Benefit Research Institute showed that 44 percent of workers are currently not saving for retirement. Instead, data show programs that offer short-term rewards and benefits are more popular. More U.S. households are currently enrolled in credit card rewards programs than retirement savings plans, according to data obtained from Claritas.

Differences in participation between credit card reward programs and retirement savings offer a window into how some households choose to prioritize short term versus long term financial planning. Credit cards come attached with the risk of debt and have a relatively high barrier to entry. Many rewards cards require users to have good or excellent credit. The points, miles or cash back users collect can be used after just a few months or years of use. Retirement products have no credit requirements, and not nearly as much risk. But individuals must have enough income to comfortably set some of it aside. Unlike credit card rewards, consumers who use retirement products will not reap the benefits for many years—in some cases, decades.

Key Findings

  • 61 percent of households nationwide are enrolled in at least one credit card rewards program, while just 58% use a retirement savings product.
  • Florida and California fared the worst: 8 out of the 10 worst-performing cities were from these two states.
  • Miami has the lowest retirement savings rate out of the 100 cities we studied. Only 39 percent of households have a retirement savings plan. However, the city is middle-of-the-pack when it comes to credit card rewards participation.