- The median amount saved for retirement in American 401ks stands at only $18,433.
- 30% of Americans rely on financial advice from family to save for retirement.
- 40% of Americans with a retirement savings account don’t know what they pay in fees.
It’s no secret that a retirement crisis is catching up to folks across America. In a transition from pension to 401k plans, retirement has become the number one financial concern for US adults. Making matters worse, the median amount saved in 401k accounts across the country is just $18,433.
That’s why we launched our Retirement Planner this summer, to help Americans of every age prepare for retirement. On the heels of Retirement Planner’s release, we conducted a Harris poll*, to see how Americans really feel as they approach retirement.
Here are the top 10 retirement trends we uncovered:
1. Americans trust family over financial advisors
30% of Americans rely on family for financial advice, over advice from a professional financial advisor (sought by 27%). Only 8% of Americans get advice from a broker.
2. Online tools are making waves
20% of Americans planning for retirement have used online planning tools to forecast their total savings at retirement age. That means 80% of people still have yet to take advantage of the many online financial planning tools on the market.
3. Retirement creates anxiety
Over half (51%) of US adults feel overwhelmed when they think about the amount of money they need to save for retirement. A meager 15% of people report that they feel somewhere between “somewhat comfortable” and “very comfortable” when they evaluate what they’ll need to retire.
4. People don’t know what they need
86% of American adults planning for retirement aren’t sure how much money they need to save, and only 18% have met with a financial advisor.
5. Most Americans feel unprepared
The majority (55%) of Americans feel unprepared for retirement; 24% feel somewhat prepared; and just 8% feel very financially prepared for retirement.
6. There is a savings shortage
The #1 reason Americans feel unprepared for retirement is they lack savings (reported by 25% of people). The #2 reason Americans feel unprepared to retire is that retirement savings take a back seat to other financial priorities, and folks aren’t sure how much money they’ll need in retirement (reported by 22% of people).
7. Cost of living takes priority
For 28% of Americans, cost of living outweighs health care (14%), age (12%), and social security (4%) as the most important factor when planning for retirement.
8. Fees are leaving folks confused
Nearly 40% of Americans who have a retirement savings account are not aware of how much they pay each year in account fees.
9. The masses are saving millions
Nearly 40% of people believe they will need to save $1 million or more for retirement.
Originally printed in USA TODAY.
10. Market volatility fuels unpreparedness
The majority (60%) of US adults are unprepared for a bear market, noting that they haven’t taken precautionary steps for a potential economic downturn.
While our survey reveals that many Americans aren’t aware of how much money they need to save to retire or if they’ll be ready when the time comes, people are in fact still saving. We collected Personal Capital user data and found out exactly how much folks are tucking away every month. According to our data, older users save more on an absolute basis, but users in their 20’s and 30’s save a higher percentage of their total assets than those in their 40’s, 50’s and 60’s (as you can see below).
Since Retirement Planner’s launch this June, nearly 30,000 people have already used it to find out if their saving and investing plans will add up to a happy retirement.
Want a full demo to see how Retirement Planner can help you prepare for financial security in your golden years? Check it out here.
*This survey was conducted online within the United States by Harris Poll on behalf of Personal Capital from May 26-28, 2015 among 2,026 adults ages 18 and older, among which 1,577 are not currently retired and 909 are not currently retired but have begun planning for retirement. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated.
The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.