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
-
How To Manage Retirement Savings When Living AbroadRetiring abroad can be a dream come true if you have a good grip on your finances. Here's what you need to know to make it a reality.
-
Irrevocable Trusts: So Many Options to Lower Taxes and Protect AssetsIrrevocable trusts offer nearly endless possibilities for high-net-worth individuals to reduce their estate taxes and protect their assets.
-
Irrevocable Trusts: So Many Options to Lower Taxes and Protect Assets
Irrevocable trusts offer nearly endless possibilities for high-net-worth individuals to reduce their estate taxes and protect their assets.
-
How to Organize Your Financial Life (and Paperwork)To simplify the future for yourself and your heirs, put a financial contingency plan in place. The peace of mind you'll get is well worth the effort.
-
Financial Confidence? It's Just Good Planning, Boomers SayBaby Boomers may have hit the jackpot money-wise, but many attribute their wealth to financial planning and professional advice rather than good timing.
-
Will You Be Able to Afford Your Dream Retirement?You might need to save more than you think you do. Here are some expenses that might be larger than you expect, along with ways to ensure you save enough.
-
Three Steps to Simplify Paying Your Taxes in RetirementOnce you retire, how you pay some of your taxes can change. Here's how to get a handle on them so you don't run afoul of the IRS and face penalties.
-
More SECURE 2.0 Retirement Enhancements Kick in This YearSaving for retirement gets a boost with these SECURE 2.0 Act provisions that are starting in 2025.
-
Saving for Your Emergency Fund: As Easy as 1-3-6An emergency fund that can cover six months' worth of expenses is far easier to build if you focus on smaller goals at first.
-
The Wrong Money Question to Ask After Trump's ElectionIf you're wondering what moves to make with a new president moving into the White House, you're being dangerously shortsighted. Here's what to do instead.
