Many Americans are concerned about their long-term financial well-being. In fact, 56 percent of U.S. adults surveyed by Ramsey Solutions said that they have lost sleep thinking about retirement. Setting aside more money, though, does not appear to be a simple solution for Americans’ old-age financial worries because 61 percent of respondents who said that they actively save for retirement still reported that they have lost sleep thinking about retirement. Interestingly, Generation-X respondents were the most likely age group to report having at least $25,000 saved for retirement, but this cohort was also the most likely to cite a loss of sleep due to old-age financial concerns.
One possible interpretation of these findings is that the people who are the most concerned about retirement (losing sleep) are also the most motivated to do something about it (save). However, a lack of certainty could also be a factor because surveyed Baby Boomers were found to be less concerned about outliving their retirement savings than Gen-X respondents, and more confident in knowing exactly how much money will need to be saved to ensure their desired old-age financial outcome. Further, surveyed Baby Boomers were a lot more likely to say that they know who to turn to with their retirement questions, which in most cases means a professional financial advisor. On a broader scale, all surveyed Americans who reported that they regularly work with an advisor were found to be nearly twice as likely as those who do not consult with a professional to say that they are “very confident” they will have enough money to retire comfortably.
A similar report from Charles Schwab found that saving enough for a comfortable retirement was by far the top reported source of financial stress for surveyed 401(k) participants in America. That is not surprising since only 43 percent of respondents said that they know how much money they should set aside to achieve their ideal old-age lifestyle. At the same time, nearly three-quarters (74 percent) of surveyed participants who said that they regularly work with a financial advisor reported being “extremely or very confident” in their ability to make the right investment decisions for their 401(k) retirement plan, compared to just 44 percent for respondents who do not seek professional advice. Schwab’s Catherine Golladay added that “In our experience, people who use 401(k) investment advice tend to save more, are better diversified, and stay the course during market uncertainty.”
Sources: Ramsey Solutions, NAPA, Charles SchwabPost author: Charles Couch