November 29, 2011
--- Although one in five mass affluent investors are saving more this year than last, many are struggling to reach long-term financial goals, according to a Bank of America survey. ---
Bank of America released its Merrill Edge Report, a semi-annual study assessing the financial concerns and priorities of what it calls the “mass affluent”—consumers with $50,000-$250,000 in investable assets. The research reveals that this group, which consists of approximately 28 million households in the United States, has taken proactive, corrective steps to improve their financial situation, but continues to seek guidance from established sources (such as financial advisers) to reach their goals.
The study found that 57% believe it will be harder to save for the long-term five years from now compared to today, and 27% feel that it will be equally as difficult to save five years from now as it is today. As a result, one in five (21%) reported that they have increased their savings in the last year.
While half of mass affluent consumers feel that their financial situation is the same as it was a year ago, a quarter of this group (23%) believes their financial situation is better than it was a year ago. Those who experienced improved financial conditions attribute their success to: eliminating unnecessary expenses (42%), paying their bills on time (40%) and sticking to a budget (37%).
Furthermore, the mass affluent plan to continue tracking and managing their money (67%) and paying down debt (47%) in the next six months. However, more than one-quarter (27%) continued to tap their long-term savings to meet short-term needs. Among them, 26% did so to cover regular monthly living expenses such as bills or groceries.