Why Young People Are Stressed Out About Retirement
Anticipation is killing the retirement mood. While having decades to save and prepare for retirement is widely considered a good thing by people strictly crunching the numbers, it’s also providing ample amount of time for younger savers to worry about their financial futures. On a positive note, two simple actions can help alleviate stress.
A recent survey by Bank of America and Merrill Edge finds people with the most time to prepare for retirement are most likely to expect financial trouble. In fact, 74% of non-retired Gen Xers and 67% of millennials with investable assets of $50,000 to $250,000 predict a stressful retirement based on how much they’re currently saving. More than four in 10 millennials say they are counting on assistance from loved ones if financial help is needed in retirement, significantly higher than the 9% of all other respondents combined. The same number of millennials, who are known as the student debt generation, say they feel behind their peers in either financial stability, saving for the future, or their income.
“Perhaps one cause of this anticipated financial stress is that a large number of non-retired Americans believe they’ll need to rely on their personal savings and investment to live on in retirement,” said Aron Levine, head of Bank of America Preferred Banking and Merrill Edge, in a press release. The survey finds 75% of non-retirees are planning to rely on their own savings and investments for financial help during retirement. Overall, 66% of non-retired Americans expect a financially strained retirement.
Much ado about nothing? Those who already retired are less likely to feel anxious about money today, providing some relief that the nation’s retirement crisis may not be quite as bad as it seems. Over half of retirees say they are not stressed about money, while 73% say they believe they will have enough money to last through retirement. In comparison, 57% of non-retired respondents think they will have enough money throughout retirement. Despite 49% of non-retirees planning to work in retirement for financial reasons, only 20% of retirees actually plan to work to receive financial assistance.
Most respondents agree an ideal retirement involves not stressing about money, traveling, and spending time with loved ones. However, you must take action to accomplish these aspirations. Contributing to a retirement account and paying off debt were the two most common measures that retirees took to reduce their stress levels ahead of retirement. Nearly half of retirees also invested as much as they could outside of retirement accounts.
“In comparison to a year ago, we’re seeing a significant jump in positive investment behaviors and intent,” said Levine. “It’s encouraging to see Americans prioritizing the future along with the present and turning financial concerns into positive investment decisions. As demonstrated by the actions of current retirees, the key to success is turning these strong emotions of stress and fear into action.”
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