This is “particularly striking among younger individuals,” noted Andy Sieg, head of Retirement and Philanthropic Services, Bank of America Merrill Lynch, speaking on a call with reporters about the latest release of the Merrill Lynch Affluent Insights Quarterly survey, conducted by Braun Research.
In fact, for four of the five reforms about which affluent Americans were surveyed, those ages 18 to 34 were most in favor of the changes. For instance, 50% of the 1,000 affluent Americans with investable assets in excess of $250,000 surveyed believe that health care coverage should be provided to all retirees. However, 71% of those ages 18 to 34 agreed.
While 49% of the total sample would like to see the maximum contribution limit for individual retirement accounts (IRAs) and employer-sponsored retirement plans such as 401(k)s increased, that varied by age. Nearly 65% of affluent Americans under the age of 50 and 74% of 18- to 34-year-olds concurred.
While 44% believe that more financial resources should be put toward Social Security, 64% of the youngest segment agreed. However, that 18- to 34- year-old group is not the least skeptical about the future of Social Security. In fact, nearly half (47%) of all affluent Americans ages 35 to 50 assume Social Security will not play a role in their retirement, and nearly 70% are skeptical about Medicare, believing it will play little to no role in offsetting medical expenses during their retirement years (24% and 53% of 18- to 34-year-olds agreed, respectively).
The “era of personal responsibility for retirement savings is upon us,” said Sieg.
Also, 44% believe more programs should be established that provide greater education in the workplace about how to save successfully for retirement. In fact, nearly 61% of those under the age of 64 indicate that they either currently do or would take advantage of such financial education or advice services if offered by their employer.
In fact, the only reform about which affluent Americans were surveyed that those age 18 to 34 were not the most favorable age group was ensuring availability of investment advice in employer-sponsored retirement plans. About one-third (35%) of all surveyed were in favor of that, but the group most supportive was those age 35 to 50 (43%).
The client focus on retirement is driving Bank of America Merrill Lynch’s initiatives, noted Sallie Krawcheck, president of Global Wealth & Investment Management. The dialogue around retirement planning is a significant focus for the company, Seig concurred. In fact, in the first quarter, Merrill completed 15,000 Roth conversions, he said, and the company has been able to achieve full year sales commitments in the first quarter.
A desire to take a closer look at retirement extends not only to individuals but institutions, Seig commented, and the company has seen momentum in the institutional business.