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
-
5 Reasons Wealthy Americans Are Skipping Homeownership: Millionaire Renters on the Rise:Homeownership isn’t for everyone, even millionaires. Discover why wealthy individuals choose to rent instead of buy, from financial flexibility to investment strategies.
-
Seven Common Tax Preparation Mistakes (and How to Avoid Them)Don't let the dark cloud of tax time hang over your head this year.
-
Tax Advantages of Oil and Gas Investments: What You Need to KnowTax incentives allow for deductions and potential tax-free earnings — benefits accessible only to accredited investors in small producer projects.
-
Charitable Contributions: Five Frequently Asked QuestionsMake the most of your good intentions by understanding the ins and outs of charitable giving. A good starting point is knowing what's deductible and what isn't.
-
Financial Leverage, Part Two: Don't Say We Didn't Warn YouA lesson in how highly leveraged investments can benefit the first movers and crush the next round of buyers.
-
Taxes in Retirement: What ESOP Participants Need to KnowMost Employee Stock Ownership Plans (ESOP) participants transfer company stock to an IRA starting around age 55, so taxes on that money have been deferred.
-
Would You Benefit From Investing in Cryptocurrency?Understanding the complexity of adding digital currency to your investments is critical, especially since drastic price changes can happen very quickly.
-
Why Company Stock May Be Riskier Than Employees RealizeStock compensation has its perks, but employees must be realistic (and unemotional) about their investments' prospects. Sometimes strategic sales are smart.
-
Can You Be Fired for Going to Work When You're Contagious?What's an employer to do when an employee shows up at the office with a cold or the flu and spreads germs to co-workers?
-
Social Security Fairness Act: Five Financial Planning Issues to RevisitMore money as a public-sector retiree is great, but there could be unintended consequences with taxes, Medicare and more if you're not careful.
