Sharper Insight. Smarter Investing. Retirement in America: The Search for Security

Transcription

1 Sharper Insight. Smarter Investing. Retirement in America: The Search for Security

2 Methodology 2 Investopedia conducted a survey among users of Investopedia.com to better understand their opinions about retirement. The web-based survey on investopedia.com was fielded between January 2-17, 2017 and resulted in 700 completed responses from investors meeting the following criteria: Live in the United States Employed (Full-time, Part-time, Self-Employed) Age 18+ Have significant input in household investment decisions

3 Key Findings 3 Saving for retirement is a challenge for many investors. While they have massively more saved than most Americans, many feel they are behind in their savings and are not confident they ll have enough to live comfortably. Saving through a 401(k) or 403(b) is not enough. Even users who are behind are using employer-sponsored accounts at the same rate as those ahead and on-track. Investors know that they need more savings and investment. Financial education is a determining factor. Novice investors feel the most behind. Financial education is a necessity for everyone.

4 Key Findings 4 Investopedia users actively manage their retirement savings - Most employ aggressive investing strategies - They contribute a sizeable portion of their paycheck to a 401(k) - They frequently check the value of their retirement accounts A sizeable segment of Investopedia users have a Financial Advisor/Planner and use Investopedia as source to prepare for their meetings.

5 RETIREMENT OUTLOOK

6 Retirement Outlook Among those saving for retirement 6 Half currently feel they are behind in saving for retirement. Do you currently feel ahead, on track or behind your retirement target? Not sure, 10% Ahead, 10% On track, 28% Behind, 52%

7 Method of Savings 7 Three quarters are contributing to an employer-sponsored account. Half are making separate investments other than official retirement accounts. How are you currently saving for retirement? Contribute to an employer-sponsored retirement account 76% Make separate investments that are not in official retirement account 50% Contribute to an individual retirement account (IRA) 45% Purchase a home/real estate 38% Other 11%

8 Method of Savings 8 Simply contributing to a 401(k) is not enough. To be ahead or on track, you must save in other ways. How are you currently saving for retirement? Contribute to an employer-sponsored retirement account 75% 74% 78% Make separate investments that are not in official retirement account 38% 53% 53% Contribute to an individual retirement account (IRA) 37% 57% 82% Purchase a home/real estate 33% 47% 42% Other 10% 9% 20% Ahead On-track Behind

9 Financial Education Level 9 Among those who are behind, 6 in 10 are Novice Investors. When it comes to investing do you consider yourself a novice, intermediate or expert? 58% 52% 63% 26% 37% 34% 14% 11% 5% Novice Intermediate Expert Ahead On track Behind

10 Profile of those Ahead (10%) 10 Those who are ahead are the oldest group and most likely to be male. Their incomes and assets are significantly higher % : 18% Average Age Male : Female $175K Average Household Income $1.9 MM Average Investable Assets $1.7 MM Average Retirement Savings

11 Profile of those On Track (28%) 11 Those who are on track are slightly younger and slightly more female. Their assets and savings drop significantly % : 21% Average Age Male : Female $146K Average Income $985K Average Investable Assets $825K Average Retirement Savings

12 Profile of those Behind (52%) 12 Those who are behind are the youngest group. They include more women than the other groups and have significantly lower incomes, assets, and savings % : 28% Average Age Male : Female $106K Average Household Income $368K Average Investable Assets $324K Average Retirement Savings

13 Confidence in Retirement Savings 13 Only half of users are confident that they will live comfortably in retirement. How confident are you that you will have enough money to live comfortably throughout your retirement years? 48% Confident 13% 11% 27% 25% 23% 1 - Not very confident Very confident

14 Confidence in Retirement Savings (by Age) 14 Confidence is mostly consistent across age groups. How confident are you that you will have enough money to live comfortably throughout your retirement years? 50% Confident % 13% 25% 23% 27% 44% Confident % 15% 25% 24% 20% 49% Confident % 8% 31% 27% 22% 1 - Not very confident Very confident

15 Confidence in Retirement Savings Among those Age Six in ten think something may delay their retirement. Healthcare costs are the leading reason. Which of the following may be delaying your ability to retire? Healthcare costs 21% House payments 15% Nothing delaying ability to retire, 38% Might be delayed, 62% Portfolio not performing as expected 14% Education expenses for yourself or your family 12% Credit card debt 10% Need more savings/lack of planning 10% Paying for elder care 5% Don t want to retire 3%

16 Confidence in Social Security 16 Only 1 in 5 younger users have confidence that Social Security will be available when they reach retirement age. How confident are you that you will receive Social Security when you reach retirement age? 66% 35% 19%

17 CURRENT SAVINGS

18 Retirement Saving 18 4 in 5 Investopedia users save for retirement 79%: Save for retirement 17%: Don t save for retirement, but think they should 4%: Don t save for retirement and don t think about saving Q: Based on how you manage your finances, is retirement part of your financial planning?

19 Approach Towards Investing for Retirement Among those saving for retirement 19 Half currently have an aggressive approach to investing their retirement savings How would you describe your approach to investing money for retirement? Cautious: 12% Very cautious, 2% Somewhat cautious, 10% Very aggressive, 16% Aggressive: 49% Balance between aggressive and cautious, 36% Somewhat aggressive, 33%

20 Approach Towards Investing for Retirement (by Age) Among those saving for retirement 20 Investors become less aggressive as they get older. How would you describe your approach to investing money for retirement? Somewhat cautious, 6% Balance between aggressive and cautious, 34% Age Age Age 50+ Very cautious, 2% Very aggressive, 27% Somewhat aggressive, 31% Very cautious, 4% Somewhat cautious, 13% Balance between aggressive and cautious, 27% Very aggressive, 16% Somewhat aggressive, 40% Very cautious, 2% Somewhat cautious, 11% Balance between aggressive and cautious, 44% Very aggressive, 11% Somewhat aggressive, 33% Aggressive: 58% Aggressive: 56% Aggressive: 44%

21 Investopedia Retirement Profile 21 Investopedia users actively contribute to their retirement accounts and have sizable savings. 11.7%: Average paycheck contribution to 401(k) $676K: Average retirement savings 65: Average projected retirement age Q: What percentage of your paycheck do you currently contribute to your 401(k) or 403(b)? Q: About how much do you currently have saved for retirement? Q: At what age do you currently plan to retire?

22 Frequency of Checking Retirement Accounts 22 A third of Investopedia users check their retirement accounts at least once a week. More than half check at least once a month. How frequently do you check the value of your retirement accounts? 61% Monthly 36% Weekly 22% 19% 14% 12% 13% 15% 4% At least once a day At least once a week Every few weeks Once a month Once every few months Once a year Rarely/never

23 FINANCIAL ADVISORS

24 Use of a Financial Advisor 24 Do you currently work with a financial advisor or financial planner? 25% currently work with a financial advisor

25 Sources of Retirement Advice 25 A majority receive retirement advice from personal finance websites From which sources do you get retirement advice? (Select all that apply) Personal finance websites 57% Friends and family 29% Advice columnists/hosts (e.g., Dave Ramsey, Suze Orman, Jean Chatzky) 28% Personal finance magazines 28% Financial advisor 25% Retirement plan provider 18%

26 Usage of an Advisor Among those who use an advisor 26 Investopedia users have different types of relationships with their advisors. How heavily do you rely on a financial advisor vs. taking matters into your own hands? Rely on an Advisor Take Matters into Your Own Hands 18% 16% 30% 21% 16%

27 Advisor Attributes Among those who use an advisor 27 Nearly all are looking for their advisor to be knowledgeable and straightforward. When working with a Financial Advisor/Planner or retirement planning, how important are each of the following for your advisor to demonstrate? Knowledgeable 94% Straightforward 93% Allow me to be actively involved in decision being made 86% Are accessible in person 68% Don't need to have face-to-face meetings but check in from time to time 53% Make all the decisions based on my needs so I don t have to worry about it 28%

28 Preparing to Meet Your Advisor Among those who use an advisor 28 8 in 10 do some sort of research prior to seeing their financial advisor; 6 in 10 do that research on a financial website. In order to be well armed prior to sitting down with your advisor, where do you turn to for information? Financial website 62% Newspaper or Magazine 35% A friend or family member 16% Social media 4% I don't do any research before meeting with my financial advisor 21%

29 Frequency of Reviewing Retirement Plan Among those who use an advisor 29 Most review their retirement plan with their advisor at least once a year. Nearly half review at least once every six months. How often do you and your advisor revisit your retirement plan 41% 29% 15% 4% 7% 4% Every couple months Every 6 months Once a year Once every two years Less often Never