Saving for Your Future Retirement Pays Immediate Emotional Dividends
Millennials Report Greatest Worries about Finance, Retirement –
Easy-to-Use Solutions Are Key to Increased Engagement
NEW YORK–(BUSINESS WIRE)–Money is the biggest source of stress among Americans —more than their
concerns about work, family or health. However, people who proactively
plan for retirement tend to be more content with their lives and have a
greater sense of personal well-being today. Americans with a retirement
savings plan are more likely (78%) to have a higher level of overall
well-being than those without one (52%).
These findings are based on BlackRock’s latest Global
Investor Pulse survey, one of the world’s largest studies of
investment behavior. This year’s study spanned 27,000 people worldwide,
including more than 4,000 in the United States. At a time when economic
anxiety is increasing, some two-thirds of Americans (69%) identified
financial health as having a significant impact on their well-being —
on par with relationships (68%), and mental (70%) and physical health
Sidelined by Financial Concerns, Americans Lack Retirement
Retirement readiness remains a significant issue in the U.S. Just 56% of
all respondents said they have started to save for retirement, and only
45% of them feel confident that they’ll achieve their “ideal
retirement.” Among the reasons: Respondents say they are too worried
about their financial situation today to think about tomorrow, citing
high cost of living (56%), healthcare costs (49%) and rising prices
(34%) as the greatest threats to their current financial health. Equally
concerning is that fewer than half (44%) of U.S. respondents said that
they have any market-based investment holdings at all, inhibiting their
progress toward long-term financial goals.
Encouragingly, there is a high correlation – a virtuous circle – between
planning for the future and a sense of overall contentment. Those with a
higher sense of well-being are also four times more likely to feel
confident about their retirement income (66% vs. 17%).
“For too many people, investing and retirement planning are all about an
intangible future,” said Robert S. Kapito, President of BlackRock.
“Thus, the incentive to start saving today just hasn’t been strong
enough. But what we found is that there are immediate benefits for those
who start early. Much as physical exercise has both short- and long-term
benefits, focusing on retirement planning helps alleviate stress and
improves your overall well-being today. Saving for your future
retirement pays immediate emotional benefits.”
Women Who Save More Worry Less – But Too Many Don’t Save at All
Women, in particular, are missing out on the financial and emotional
benefits of investing. While those who have a retirement plan report a
higher well-being (76%) vs. those who do not (53%), only half (52%) of
U.S. women have started to save for retirement at all. For 64% of this
group, just the thought of investing is a source of stress, compared to
50% of U.S. men.
The Global Investor Pulse found that only 38% of U.S. women invest in
the financial markets and more than half (55%) say investing is not for
“people like me.” U.S. women who do invest take a more cautious
approach, with 38% willing to increase their investment risk to achieve
higher returns, compared to 56% of men.
Millennials’ Money Angst
While money was ranked as the number one source of stress among
respondents overall, millennials, who represent a third of the U.S.
workforce1, reported worrying about their finances more than
any other age group. More than half (58%) of them said that they are too
worried about their current financial situation to think about their
future. Seventy-seven percent of millennials feel that there are too
many investment options to choose from and six in ten (59%) said they
don’t know where to go for retirement planning advice. Encouragingly,
the vast majority of adults age 25 to 37 (84%) believe their financial
outlook would improve if they started investing.
“Millennials, more than any other generation, have embraced technology
in nearly all aspects of their lives,” said Kapito. “The industry should
work to meet millennials where they are – and build better and more
intuitive systems that help prepare them for retirement as early as
Make It Easy
Given the challenges of many Americans to actively engage with their
retirement planning, it’s clear that easy-to-use investment solutions
could help alleviate both financial and emotional barriers. Among those
who have started investing, seven in ten (70%) U.S. respondents said new
technology solutions would help them be more involved in their
investments. In addition, the study found that 83% of respondents who
work with a financial advisor reported a high sense of well-being,
compared with 61% of those who don’t.
For many people, getting started is the hardest part. Finding a solution
that makes it simple to invest for the future would create a virtuous
circle with lifelong benefits.
BlackRock helps investors build better financial futures. As a fiduciary
to investors and a leading provider of financial technology, our clients
turn to us for the solutions they need when planning for their most
important goals. As of December 31, 2018, the firm managed approximately
$5.98 trillion in assets on behalf of investors worldwide. For
additional information on BlackRock, please visit www.blackrock.com.
About the Global Investor Pulse Survey
BlackRock’s Global Investor Pulse Survey examines investing behaviors
across the world. The 2019 survey included 27,000 respondents in 13
countries. The U.S. sample included more than 4,000 respondents. More
information can be found at www.blackrock.com/investorpulse.