New research from Aon Hewitt on Americans’ recent money-related attitudes and behaviors suggests that overall financial confidence is trending higher for many employed adults. For example, nearly three out of every four workers (73 percent) surveyed by Aon Hewitt reported that they currently feel in control of their financial future, and 64 percent said that their personal financial situation is going “fairly well” or better. Eliminating debt was found to be important for around eight in ten (79 percent) surveyed workers, and more than half (54 percent) believe that they are doing a “good job” of keeping their household’s financial affairs in order. Roughly two-thirds (65 percent) of employee respondents described themselves as being “financially savvy,” and half (51 percent) said that if they suddenly received a $1000 windfall that they would save and invest most of it.
Despite the apparent optimism, surveyed workers acknowledged that there are a variety of financial challenges that they are currently concerned about. The cost of healthcare, for instance, was reported to be a top money-related worry for nearly half (48 percent) of respondents, and 44 percent said that they are similarly concerned about saving for their financial future. With respect to the latter, 77 percent of surveyed working Americans said that one of the main things that motivates them to save money is the desire to achieve a comfortable retirement. Moreover, 82 percent reported that having adequate retirement income is a current savings priority, and 67 percent said the same about wealth accumulation. As for what prevents some workers from saving as much as they would like to, 42 percent pointed to being at least somewhat concerned about not being able to access their money when needed. Unsurprisingly, 46 percent of respondents said that having the ability to take a loan from their employer-provided retirement plan is important to them.
More than half of surveyed workers also said that matching contributions, tax advantages, unique investment access, low fees, and ease of saving through automatic payroll deductions are all plan features that influence their decision to utilize an employer-provided retirement savings plan. Setting money aside, though, is just one aspect of achieving long-term financial goals but encouragingly most surveyed employees reported that they have already done some kind of financial planning. However, many workers expressed a need to do more planning, particularly in the areas of managing short-term finances, purchasing or financing a home, determining life insurance needs, and creating/updating wills, trusts, or other legal activities. As for planning specific to retirement, relatively few surveyed workers believe that they have done enough preparation and most respondents feel that they need to do more when it comes to determining how much to save, where to invest, and what their expected retirement lifestyle will be. Eighty-six percent also said that they have to do a better job of estimating their potential old-age outlays, e.g. medical expenses, shelter costs, long-term care needs, etc.
Sources: Aon HewittPost author: Charles Couch