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.
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.