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.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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
-
I'm a Financial Pro: This Is How You Can Guide Your Heirs Through the Great Wealth TransferFocus on creating a clear estate plan, communicating your wishes early to avoid family conflict, leaving an ethical will with your values and wisdom and preparing them practically and emotionally.
-
To Reap the Full Benefits of Tax-Loss Harvesting, Consider This Investment Strategist's StepsTax-loss harvesting can offer more advantages for investors than tax relief. Over the long term, it can potentially help you maintain a robust portfolio and build wealth.
-
Social Security Wisdom From a Financial Adviser Receiving Benefits HimselfYou don't know what you don't know, and with Social Security, that can be a costly problem for retirees — one that can last a lifetime.
-
Take It From a Tax Expert: The True Measure of Your Retirement Readiness Isn't the Size of Your Nest EggA sizable nest egg is a good start, but your plan should include two to five years of basic expenses in conservative, liquid accounts as a buffer against market volatility, inflation and taxes.
-
New Opportunity Zone Rules Triple Tax Benefits for Rural Investments: Here's Your 2027 StrategyNew IRS guidance just reshaped the opportunity zone landscape for 2027. Here's what high-net-worth investors need to know about the enhanced rural benefits.
-
The OBBB Ushers in a New Era of Energy Investing: What You Need to Know About Tax Breaks and MoreThe new tax law has changed the energy investing landscape with expanded incentives and permanent tax benefits for oil and gas production.
-
Ten Ways Family Offices Can Build Resilience in a Volatile WorldFamily offices are shifting their global investment priorities and goals in the face of uncertainty, volatile markets and the influence of younger generations.
-
Should Your Brokerage Firm Be Your Bookie? A Financial Professional Weighs InSome brokerage firms are promoting 'event contracts,' which are essentially yes-or-no wagers, blurring the lines between investing and gambling.
