Workers with the most time to prepare for retirement are the most stressed about their abilility to adequately save between now and their golden years, according to the most recent Merrill Edge report from Merrill Lynch.
Gen Xers and millennials were more likely to anticipate saving shortfalls than were baby boomers and those already retired.
The survey examined savers with $50,000 to $250,000 in investable assets. Among the cohort, 74% of Gen Xers and 67% of millennials are predicting financial stress in retirement, given how much they are saving now.
But 59% of current retirees surveyed say they are not stressed over finances, and 73% say they will have enough to live on through retirement, compared to 57% of non-retirees.
Older investors are upping their financial planning game by turning more frequently to modern tools.
Those counter-intuitive figures are instructive, Aron Levine, head of Merrill Lynch, said.
“It's natural to be more concerned about an immediate issue versus something that's well down the road,” Levine reasoned in a video release accompanying the study's results. “That's why the latest results surprised us.”
He speculated that younger savers and pre-retirees might be more anxious because they will have to rely on their own savings and investments at greater rates than retirees, more of whom have guaranteed income streams from defined benefit plans.
Today's savers should take note that fewer retirees are suffering anxiety in retirement.
“Younger Americans can learn from their experience – that preparation pays off,” he said.
Four in 10 retirees said they invested outside of a workplace retirement account in order to maximize retirement assets, while only 24% of non-retirees either do, or are able to do the same.
About 63% of the retirees surveyed contributed to a workplace savings account, while only 57% of non-retirees said they are doing so.
Less than one-quarter of pre-retirees are working with a financial advisor, while 38% of retirees said they utilized formal advice in preparing for retirement.
About half of workers non-retired said they plan on working at least part time into retirement, while only 20% of retirees said they are, or plan on working in retirement.
Predictably, more millennials are turning to technology to plan for retirement – 27% said they use websites or apps to manage funds, compared to 16% of Gen Xers, 11% of baby boomers, and 5% of retirees.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
