Retirement Is Americans’ No. 1 Financial Priority

But people give themselves a “C” when it comes to actually being prepared to retire.

Retirement is Americans’ No. 1 financial goal, Prudential Investments learned in a survey. However, when it comes to actually being prepared to retire, people give themselves a “C.”

“Understanding the hurdles keeping people from a secure financial future is critical to helping them meet their goals,” says Stuart Parker, president of Prudential Investments. “This research reinforces the need for people to seek advice and the need for the investment community to give advisers the best tools and solutions available.”

The survey found that 66% of Americans think investing is complex and confusing. Sixty-six percent said that investing today is more complicated than it was for their parents, and 64% say they are overwhelmed by the choices available. Forty-two percent do not know how their investments are allocated, and 43% are not knowledgeable about the types of products they have invested in.

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Seventy-four percent of pre-retirees think they should be doing more to become prepared, and 40% have no idea what to do. While 24% think they will need $1 million or more to fund their retirement, 54% of pre-retirees have less than $150,000 saved.

Seventy-five percent of retirees think that the generations following them will have a more difficult time saving for retirement. Twenty-percent of pre-retirees don’t think they will ever be able to retire, and 35% say they will never be able to save enough.

Across all generations, 57% said that if they faced a financial emergency, they would tap into their retirement savings. However, 32% of Millennials would turn to family or friends to borrow money, and 18% would take out a bank loan.

NEXT: Retiring earlier than planned

Fifty-one percent of retirees said they left the workforce earlier than they had planned. Among this group, 50% retired five or more years earlier than expected. Also among this group, 42% retired early due to their own or a loved one’s health problems. Thirty-two percent were laid off or offered an early retirement incentive package.

Retirees’ biggest fears were health care costs (57%), Social Security curtailments (57%) and illness or disability (45%).

Thirty-seven percent of all Americans think a professional financial adviser is the best way to learn about investing, and 44% are working with an adviser. The second most cited source for information is financial institution websites, with 34% citing this. Seventeen percent rely on their employer, and 14% do not use any resources at all.

Harris Poll conducted the online survey of 1,568 adults age 21 and older for Prudential in July and August.

Financial Advisers Weigh In On Trump Victory

A new survey found that most independent financial advisers expect a strong economy for 2017 under President-elect Donald Trump, and a majority want him to repeal the DOL fiduciary rule.

Independent financial advisers servicing the retirement planning industry were keeping a close eye on the recent presidential election, especially in light of sweeping industry changes such as the Department of Labor (DOL)’s Conflict of Interest rule. 

According to a survey by the Financial Services Institute, 86% of financial-services firms and independent advisers want President-elect Donald Trump to repeal the fiduciary rule.

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The survey also found that 71% of respondents said they cast their vote for Trump, while 19% said they voted for Clinton. Under a Trump presidency, 58% of advisers said they expect a strong economy in 2017, and 56% said they expect 2017 to be a strong year for equity performance.

“Main Street financial advisers serving retirement savers have their finger on the pulse of the lives of their hard-working clients and it’s important that we tap into their perspective,” says FSI President and CEO Dale Brown. “Our members have a unique vantage point on these issues, as they work closely with investors of all sizes and means, to help them save for retirement, fund their children’s education and care for aging parents. Our members, who are Main Street not Wall Street, contributed $48 billion to the U.S. GDP in 2015. Their call to repeal the DOL fiduciary rule as soon as possible is driven by their clients’ need to access their help in securing a dignified retirement. Last year, the clients of our members sent over 100,000 letters to the Department of Labor, pleading for relief from the rule. It’s time we allow these professionals to serve their clients in a way that they want and deserve to be served.”

Only 3% believe tax increases should be a part of any tax reform deal next year, the survey found. And more than half of advisers now have a succession plan in place – up 10% from FSI’s last poll two years ago.

The potential and still uncertain impact of the DOL fiduciary rule caused many to speculate whether independent financial advisers would exit the business. However, about two-thirds of advisers said they don’t plan to buy or acquire another practice or book of business within the next one to five years. For those who responded “yes,” the main motivation for that decision was a need for scale to remain profitable (28%). When asked whether they planned to do this within the next five to ten years, 73% of advisers said “No.”

When asked whether they plan to retire or sell practice within the next five to ten years, 74% said “no.” Of the group that said “yes,” retirement was the main reason (67%), followed by opportunity to monetize the practice (9%), compliance burdens (7%), and the DOL Fiduciary rule (6%).

FSI is a trade association for independent financial-services firms and independent financial advisers. The survey polled more than 1,300 professionals in these fields a week after the election.

More information about the results can be found at FinancialServices.org

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