Many Baby Boomers Concerned About Retirement Savings, Taking Less Action, Scottrade/BetterInvesting Study Shows
Too Much Debt - Not Enough Savings is causing "extreme stress for
many boomers"
ST. LOUIS--(Business Wire)--
Sixty-one percent of baby boomers say they are spending less in
the current economy, but the money they are saving is not going toward
retirement, according to the Scottrade/BetterInvesting 2008 American
Retirement Study. The survey was sponsored by Scottrade, the leading
online investment firm with 340 branches in the U.S., and
BetterInvesting, a leading provider of investment education, and a
pioneer of the modern-day investment club movement.
The Scottrade/BetterInvesting study shows that only 40 percent of
Americans between 45 and 64 years of age are saving more to alleviate
their financial concerns, yet more than half of those polled don't
believe they have saved enough for retirement. Even more alarming, 38
percent of baby boomers aren't even sure how much they should have
saved or need to save and nearly a quarter (24 percent) have less than
$25,000 saved so far.
"The survey shows a trend of extreme stress for many boomers
especially in the current uncertain economy," said Chris X. Moloney,
Scottrade's Chief Marketing Officer. "Everyone knows that they should
be putting money away for retirement, but according to our survey, 57
percent of all Americans plan to put away less than 5 percent of their
income in 2008, and 26 percent don't expect to save anything."
Even if confronted with a small wind-fall of $5,000, only 15
percent would deposit the money in an IRA or other retirement account,
and almost half (48 percent) would pay down debt, while 32 percent
would put the money in a savings account. Just three percent would go
on a shopping spree. "People think more about their finances when the
economy is shaky, but it appears most people are not saving like they
know they should be for their future," Moloney added. "What kind of
future they are going to have is pretty dependent on a long-term
savings strategy in most cases."
The Fog of Retirement
In 2007, 83 percent of Americans had begun saving for retirement,
but in 2008 that number has dropped to 78 percent. Less than a third
of Americans say that they have thought about retirement more than a
few times in the last year.
Yet 51 percent of Americans remain very or extremely concerned
about retirement. Other top financial concerns include, managing
day-to-day expenses (46 percent) and being able to pay for unexpected
major expenses (47 percent).
"It's hard to think about retirement when day-to-day expenses
become a priority," said Bonnie Reyes, President of BetterInvesting,
"But, getting out of the habit of putting even a small amount into an
IRA, or other type of retirement account is like not going to the gym
for a few weeks, it's hard to start up again."
The study shows Americans are still concerned about their finances
in 2008 as compared with this time last year, but they are doing less
to reduce their financial concerns. "Generally, the study shows
Americans are more focused on short-term objectives. Yet, they know
they need to be saving and investing in their IRAs," Moloney said.
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*T
What actions are Americans taking to reduce their financial concerns?
2008 2007
Nothing 17% 10%
Spend less 83 90
Pay down debt 49 55
Not using credit cards 41 49
Saving more 38 45
Working more 22 30
Looking for higher paying job 20 25
*T
Could've, Would've, Should've
One of the most telling parts of the survey may be asking
Americans over 55 how they feel about their retirement planning.
Fifty-one percent say they wish they had started at a younger age and
40 percent say they wish they would have saved more. While hindsight
is always clear, the Scottrade/BetterInvesting study shows that more
than 43 percent said they could have saved more than they did.
"The power of compounding has been lost on each and every dollar
that 'could've' been invested. The impact of that is significant.
Time, disciplined investing and compounding are a retiree's best
friends," said Moloney.
"Economic cycles - good or bad - are no strangers to Americans
over 55 years of age, and are a fact of life for any long-term
investment strategy. Contributing only during the good times, and
sitting on the sidelines during the bad, will have a significant
negative impact on retirement strategies. When you're investing for
retirement, especially when you're young, just being in the game can
be more important than the score," Reyes said.
About The Scottrade/BetterInvesting 2008 American Retirement Study
The 2008 American Retirement Study by Scottrade polled 1,000
Americans 18 years of age or older using Synovate's national online
research tool, eNation(R), in early January 2008 to gauge Americans'
attitudes and behavioral information about retirement and retirement
planning. The sample was balanced to be representative of the general
population based upon region, gender, age and household income data
from the U.S. Census Bureau. The margin of error was +/- 3 percent.
The survey asked questions about a wide range of retirement topics,
such as the respondents' feelings toward Social Security and the
amount of money people feel they need for retirement. More data from
the survey will be made available in the coming weeks.
About Scottrade
Scottrade is a leader in online investing, serving individual
investors who are comfortable making their own investment decisions.
Scottrade is unique in the industry because it boasts low commission
rates while offering the largest branch network among online
brokerages, with 340 local branch offices nationwide. In October,
Scottrade was named Highest in Investor Satisfaction by J.D. Power and
Associates for the seventh time. Scottrade.com is the online trading
site of Scottrade, Inc. and offers customers the convenience of
placing many orders online for just $7 per trade. In addition to its
online capabilities, Scottrade staffs each easily accessible branch
location with a branch manager plus additional brokers and assistants.
For more, visit www.scottrade.com.
About BetterInvesting
BetterInvesting is the brand identity of the National Association
of Investors Corporation, a national, nonprofit association with
members consisting of individual investors and investment clubs.
Founded in 1951 and with headquarters in Madison Heights, Mich.,
BetterInvesting is considered the voice of the individual investor, as
well as the pioneer of the modern investment club movement.
BetterInvesting is dedicated to providing a sound program of
investment education and information to help its members become
successful long-term, lifetime investors. For more information about
BetterInvesting, visit its Web site at www.betterinvesting.org or call
toll free (877) 275-6242. For additional BetterInvesting data and news
releases, visit the Newsroom Web site at
www.betterinvestingnewsroom.org.
Scottrade
Kelly Doria, 314-965-1555 ext. 1231
kdoria@scottrade.com
Copyright Business Wire 2008
