Retirement is a monumental life goal, one that most Americans keep their eye on throughout their working life (and rightfully so!). 2023 is off to a shaky start, with up and down markets due to macroeconomic uncertainty, leaving many feeling their retirement aspirations are harder to reach with each passing day.
When it comes to reaching retirement, we set out to better understand how American workers are feeling and why. With our partner OnePoll, we surveyed 2,000 adults across generations.
One of the major findings? There is a major void in confidence when it comes to financial security.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
While nearly 70% of Americans plan to retire, over 40% who are not confident about their prospects of retirement said it’s because they don’t think they’ll have enough savings to do so.
Moreover, 7 in 10 respondents feel they are behind on certain life goals they’d thought they would have reached by now.
What’s behind this delta between retirement planning and financial confidence?
Financial Literacy
Just like a mechanic popping the hood of your car at a body shop, we took a deeper dive into the data set to get a better sense of what’s causing this confidence issue.
One possible cause to consider is lack of time; 26% of respondents said the fact that they never started planning for retirement will likely deter them entirely.
Yet another possible cause with deeper roots is a lack of knowledge when it comes to the most important products and solutions that can help deliver a secure financial future.
While more than 1 out of 4 respondents (26%) said they don’t have a strong understanding of what to do when it comes to retirement planning, that reasonable data point becomes more alarming after some additional digging. More than half of Americans (59%) don’t have a 401(k), one of the primary savings vehicles for retirement. Of those who do have a 401(k), 21% don’t know how much money they have. Sixty-five percent of those surveyed don’t have or don’t know what an IRA is.
These eyebrow-raising data points underscore a major challenge for both consumers and our industry: How do we help customers understand and build their own personal financial knowledge and skill sets to instill that missing confidence?
Road Ahead
Despite these somber findings, there are clear and present opportunities to help consumers get back their confidence for the retirement they deserve, and it starts with expanding access.
Expanding access is to take a more holistic approach when it comes to helping those achieve retirement. That approach includes technology, education and products and solutions that actually meet the needs of consumers wherever they are in life.
There are places people can turn to for help. Consumers can tap into online tools to get a better read on where they stand and some next steps. They can also find a trusted financial advisor, including virtual advisors who make it easy to get people started from the comfort of their home.
According to the survey, a majority of Americans appear willing to turn to different places for help. Sixty-five percent of respondents said they would use online tools and resources if there’s an opportunity to connect remotely with a financial advisor, while a similar number (62%) said they would use these same tools if they could also connect with an advisor in person.
But the hybrid approach alone isn’t a swish of the wand to instilling confidence in consumers. It’s creating personalized, tailored connections to the individual in beginning or adjusting retirement planning that understands their current circumstances, goals and headwinds against the backdrop of the moment in time they’re in at any stage in life.
The road to retirement is often a bumpy one, but finding and instilling confidence in consumers is the key to their secured financial futures.
1069334-00001-00
-
Donating Complex Assets Doesn't Have to Be ComplicatedIf you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
Travel trends you can expect this summerThe Kiplinger Letter Domestic trips will trump foreign travel amid economic uncertainties, though some costs are down.
-
Donating Complex Assets Doesn't Have to Be Complicated
If you're looking to donate less-conventional assets but don't know where to start, this charity executive has answers, such as considering a donor-advised fund (DAF) for its tax benefits and ease of use.
-
Think a Repeal of the Estate Tax Wouldn't Affect You? WrongThe wording of any law that repeals or otherwise changes the federal estate tax could have an impact on all of us. Here's what you need to know, courtesy of an estate planning and tax attorney.
-
In Your 50s? We Need to Talk About Long-Term CareMany people don't like thinking about long-term care, but most people will need it. This financial professional recommends planning for these costs as early as possible to avoid stress later.
-
Social Security Pop Quiz: Are You Among the 89% of Americans Who'd Fail?Shockingly few people have any clue what their Social Security benefits could be. This financial adviser notes it's essential to understand that info and when it might be best to access your benefits.
-
Such Attractive Yields in High-Grade Munis Are Rare and May Not Last LongAccording to this munis expert, the last time munis were this cheap was a brief period in 2023. If you kicked yourself for missing out then, you have a second chance now.
-
Financial Analyst Sees a Bright Present for Municipal Bond InvestorsHigh-tax-bracket investors have an excellent opportunity to secure low-volatility, high-quality returns at yield levels rarely seen in over a decade.
-
I'm an Insurance Pro: How Not to Get Dumped by Your Insurance AgentYour insurance agent or broker might show you the door if you do any of these five things. Being a good customer is about more than paying your bill on time.
-
Two Estate Planning Issues You Should Never OverlookThis estate planning attorney explains why proper asset titling and beneficiary designations make a big difference when it's time to transfer your wealth.
