While most Americans understand the importance of saving for retirement, taking the necessary steps to build an adequate nest egg continues to lag on their priority lists, according to Capital One ShareBuilder’s Financial Freedom Survey measuring current sentiment and behaviors related to investing and retirement, and gauging America’s progress on the path to financial freedom. Key findings from the survey include:
- Ninety-three percent of working Americans know they should be contributing to their retirement, but only 72 percent are doing so.
- Saving for kids’ education keeps more Americans up at night than planning for retirement.
- Despite Americans estimating they should be contributing 12.1 percent of their income on average, only an estimated 6.4 percent is currently being saved.
- Fifty-eight percent of Americans plan to retire by age 65, yet nearly the same percentage fear they’ll never save enough.
- Among non-retirees, women (61 percent) are significantly more concerned than men (52 percent) that they may never save enough for retirement.
- One quarter of non-retired men report they are not at all concerned with the prospect of not having enough to retire, and employed men tend to save a higher percentage of their income for retirement than women (an estimated 7.2 percent vs. 5.6 percent, respectively).
- Non-retired Americans ages 45-64 are more likely to be concerned they’ll never save enough for retirement (at 63 percent), while younger generations (ages 18-34) are less likely (at 52 percent).
- On average, employed Americans believe they should be saving roughly 12.1 percent of their income for retirement – this is nearly double the estimated 6.4 percent of their income that is currently being saved.
- The majority (58 percent) of non-retired Americans are planning to retire by age 65, but 57 percent are concerned they’ll never save enough, with 41 percent believing they are saving less than the average person their age.
- Employed Americans ages 35-64 are significantly more inclined to believe they should be saving more than 10 percent of their income for retirement compared to younger adults ages 18-34 (57 percent vs. 41 percent, respectively).
“When determining how much to save for retirement, there are a number of questions to ask and options to consider. For starters, it’s important to understand your time horizon, risk tolerance and goals – do you plan to move, would you like to travel, or take up new hobbies? You should also prepare for unexpected and rising costs, like healthcare,” said Greenshields. “Retirement looks very different for different people, and it’s important to enter that phase of life with eyes wide open.”Increasing Confidence Despite struggles to prioritize saving for retirement, non-retired Americans are becoming increasingly more confident when it comes to making investment decisions, with 31 percent primarily trusting themselves and 28 percent trusting financial advisors. Among those who are not retired:
- Men are significantly more likely than women to trust themselves the most for financial advice (36 percent vs. 25 percent, respectively), while women are more inclined to trust their financial advisor or broker (33 percent, vs. 23 percent of men).
- Differences also emerge among age groups, with 18-34 year olds being most trusting of family members (43 percent), and those 65 and older most trusting of themselves (53 percent).
- Financial advisers or brokers are more likely to be a trusted source of advice among 35-64 year olds (34 percent) as opposed to 18-34 year olds (21 percent).
- Only 12 percent of respondents age 65 or older trust advisers over other sources.
- Men (47 percent) vs. women (37 percent)
- Adults ages 35-44 (54 percent), vs. 18-34 year olds (35 percent) and those 45 and older (41 percent)
- College graduates (52 percent), vs. those with less education (38 percent)
ShareBuilder offers a range of tools including RetireMyWay and PortfolioBuilder, plus a variety of straightforward education available in its KnowledgeCenter, all designed to help Americans get on the path to retirement. For more information, visit www.sharebuilder.com.Survey Methodology The findings reported in this release are from a telephone survey conducted by the market research firm ORC International (ORC). The survey was sponsored by Capital One ShareBuilder and conducted via ORC’s CARAVAN Telephone Omnibus Survey. ORC completed 1,008 landline and cell phone interviews with US resident adults age 18 and older from February 13-16, 2014. The margin of error for the national sample is +/- 3 percentage points at the 95 percent confidence level. Sampling for this study was conducted using two national probability samples, one for the landline and one for the cell phone. All interviews were conducted using a computer assisted telephone interviewing system. Data were weighted to United States Census Bureau statistics. About Capital One ShareBuilder Capital One ShareBuilder is a leading online investing site for investors who have long-term financial goals and want to say goodbye to investing complexity. Whether you’re a seasoned investor or just getting started, ShareBuilder by Capital One has tools and resources to help Americans plan their financial futures. No minimum balance required when you open an account and pay low commissions when investing. Trade when you want, any amount you want, and what you want — stocks, exchange-traded funds, mutual funds, options and retirement solutions. Securities products are offered by Capital One ShareBuilder, Inc., a registered broker-dealer and Member FINRA/SIPC. Capital One ShareBuilder, Inc. is a subsidiary of Capital One Financial Corporation. Securities products are: Not FDIC insured - Not Bank guaranteed - May lose value