Americans have many sources of financial stress, according to a new survey conducted by Charles Schwab. For example, job security, monthly expenses, healthcare costs, and debt reduction were among respondents’ most commonly cited financial stressors. However, the top source of financial stress reported by surveyed adults was saving enough money for a comfortable retirement. That is not too surprising since roughly one in six active savers said that they wish they had set aside more money in their 401(k).
What is worse is that 60 percent of respondents said that this tax-advantaged savings vehicle is their largest retirement asset, including 19 percent that said their 401(k) is their only source of old-age savings. When asked about the obstacles that prevent participants from contributing as much as they would like to their 401(k), the top responses included unexpected expenses, such as home repairs, and an unwillingness to sacrifice their current standard of living. Similarly, 15 percent of respondents said that they wish they had spent less on non-necessities, and 13 percent would have preferred to have accumulated less debt.
Despite all of these negatives, 85 percent of surveyed active savers still said that they feel at least “pretty good” about their personal financial health, including 30 percent that reported feeling “very good.” Further, two out of three respondents said that they have increased the size of their periodic 401(k) contributions within the past two years. Twenty-eight percent cited a “promotion or salary increase” as the reason for their savings boost, likely a reflection of the continued economic expansion in America.
Eighty-one percent of surveyed active savers also said that they believe their 401(k) is in better shape today than ever before, and 85 percent reported that they would think twice about taking a new job if the employer did not offer a 401(k) plan. Seven in ten respondents, though, said that they would like more personalized investment advice for their 401(k), 66 percent expressed a desire for an easier way to know how to choose the investments for their 401(k), and 44 percent said that they regularly stress over choosing the right investments for their 401(k).
Sources: Charles SchwabPost author: Charles Couch