Merrill Edge® Report Finds Younger Generations
May Never Stop Working; Will the Traditional Idea of Retirement
Soon Be Extinct?
Younger generations may never experience retirement as it’s
defined today, according to the latest Merrill Edge® Report. The
majority (83 percent) of millennials plan to work in retirement,
whether for income, to keep busy or to pursue a passion, which is a
complete inverse of the 83 percent of today’s retirees who are not
currently working or never have during their golden years.
The survey of more than 1,000 mass affluent Americans1,
conducted between September 24 and October 5, 2016, reveals an
upheaval in how the largest generation in today’s workforce will
plan and save for their later years. Exactly half of younger
millennials, ages 18-24, believe they need to take on a side job to
reach their retirement goals, compared to only 25 percent of all
respondents.
Perhaps this mentality is why millennials (15 percent) are three
times more likely than Gen-Xers and baby boomers (5 percent) to
rank an employer’s retirement plan as the most important factor
when taking a new job.
“In previous reports, we found younger generations were
redefining what it means to retire. This report goes one step
further and questions if the milestone as we know it today is
nearing extinction,” said Aron Levine, head of Merrill Edge. “If
millennials and Gen-Xers want a traditional retirement, they need
to take action in the short term and plan for the uncertainties of
the long term, especially as we continue to see competing
priorities, such as paying down debt and caring for aging parents
and children, derail these good intentions.”
Growing savings insecurities
The report found many millennials and Americans overall are
unable to articulate their “magic number” — the amount of money
they need to live their desired retirement — and those who can are
underestimating the amount. When asked what their magic number for
retirement is, 56 percent of respondents don’t anticipate needing
more than $1 million, and 19 percent simply “don’t know.”
Furthermore, nearly the same number of respondents believe they
need to win the lottery to reach their financial goals in
retirement (17 percent).
When asked why they are saving, the majority of Americans cite
affording daily life (57 percent), closely followed by taking care
of family (45 percent). But this doesn’t mean all respondents are
comfortable discussing these affairs with their closest
relationships – only 36 percent are comfortable talking about
current retirement savings with their family members.
Despite visible insecurities with discussing their own number,
the mass affluent still believe they are better at saving than many
of their friends (43 percent), co-workers (28 percent) and
significant other (27 percent).
Reinventing investment ideals
The investment ideals of yesteryear are also likely to become
defunct as younger generations are increasingly describing their
investment approach as “hands on.” Millennials are leading the
charge in relying on themselves for savings (70 percent, compared
to 60 percent of all respondents), and citing they make their own
rules to investments (32 percent, compared to 19 percent).
However, this sense of self-reliance seems to be increasing a
need for further financial guidance and validation from
professionals in these decisions. Millennials are most likely to
plan to hire a financial advisor within the next five years (31
percent), and are the most open to receiving financial advice
online (42 percent).
“Younger generations are taking a more active approach to saving
for retirement. Many investors across all age groups are now
merging the guidance they receive from a variety of sources,
whether it’s online or in-person with an advisor,” said Levine.
“This growing shift is a significant driver of our decision to
develop an online investment advisory program that combines the
best of both worlds to help customers feel more confident in their
investment decisions.”
For more in-depth information about the financial behaviors and
priorities of mass affluent Americans, read the entire Fall 2016
Merrill Edge Report here. A complementing infographic is available
here.
1 Merrill Edge Survey MethodologyBraun Research, Inc. conducted
a nationally representative telephone survey on behalf of Merrill
Edge. The survey was conducted from September 24, 2016 through
October 5, 2016, and consisted of 1,045 mass affluent respondents
throughout the U.S., defined as individuals with investable assets
(value of all cash, savings, mutual funds, CDs, IRAs, stock, bonds
and all other types of investments excluding primary home and other
real estate investments). Respondents in the study were defined as
aged 18 to 34 (millennials) with investable assets between $50,000
and $250,000 or those aged 18 to 34 who have investable assets
between $20,000 and $50,000 with an annual income of at least
$50,000; or aged 35-plus with investable assets between $50,000 and
$250,000. We conducted an oversampling of 300 mass affluents
in the following markets: San Francisco; Los Angeles; Orange
County, California; Dallas; New Jersey; South Florida; Chicago;
Atlanta; and Phoenix. The margin of error is +/- 3.0 percent for
the national sample and about +/- 5.7 percent for the oversample
markets, all reported at a 95 percent confidence level.
Merrill EdgeMerrill Edge is a streamlined investment service
that provides access to the investment insights of Merrill Lynch
and the convenience of Bank of America banking. With Merrill Edge,
clients can view their Merrill Edge investment and Bank of America
bank accounts on one page online. They also have access to
easy-to-use tools, actionable insights, one-on-one guidance and
competitive pricing for online trades. If clients prefer to receive
advice and guidance to pursue and track financial goals, Merrill
Edge Roadmap®, available with a Merrill Edge Advisory Center™
account, allows them to work one-on-one with a Merrill Edge
Financial Solutions Advisor to develop a personalized action plan
and receive specific investment recommendations tailored to them
and their personal goals.
Bank of AmericaBank of America is one of the world's leading
financial institutions, serving individual consumers, small and
middle-market businesses and large corporations with a full range
of banking, investing, asset management and other financial and
risk management products and services. The company provides
unmatched convenience in the United States, serving approximately
47 million consumer and small business relationships with
approximately 4,600 retail financial centers, approximately 16,000
ATMs, and award-winning online banking with approximately 34
million active accounts and more than 21 million mobile active
users. Bank of America is a global leader in wealth management,
corporate and investment banking and trading across a broad range
of asset classes, serving corporations, governments, institutions
and individuals around the world. Bank of America offers
industry-leading support to approximately 3 million small business
owners through a suite of innovative, easy-to-use online products
and services. The company serves clients through operations in all
50 states, the District of Columbia, the U.S. Virgin Islands,
Puerto Rico and more than 35 countries. Bank of America Corporation
stock (NYSE: BAC) is listed on the New York Stock Exchange.
Visit the Bank of America newsroom for more Bank of America
news, and click here to register for news email alerts.
www.bankofamerica.com
Neither Merrill Lynch nor any of its affiliates or financial
advisors provide legal, tax or accounting advice. You should
consult your legal and/or tax advisors before making any financial
decisions.
Banking products are provided by Bank of America, N.A., and
affiliated banks, Members FDIC and wholly owned subsidiaries of
Bank of America Corporation.
Merrill Edge® is available through Merrill Lynch, Pierce, Fenner
& Smith Incorporated (MLPF&S), and consists of the Merrill
Edge Advisory Center (investment guidance) and self-directed online
investing.
MLPF&S is a registered broker-dealer, Member SIPC and wholly
owned subsidiary of Bank of America Corporation.
Investment products:
Are Not FDIC Insured
Are Not Bank Guaranteed
May Lose Value
© 2016 Bank of America Corporation. All rights reserved.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161202005079/en/
Reporters May Contact:Mike Conner, Bank of America,
1.980.386.8359michael.l.conner@bankofamerica.com
Bank of America (NYSE:BAC)
Historical Stock Chart
From Apr 2024 to May 2024
Bank of America (NYSE:BAC)
Historical Stock Chart
From May 2023 to May 2024