Data & Research August 29, 2016

Other Financial Objectives Compete with Retirement Savings

A survey segments respondents based on the propensity to save regularly and their general feelings toward money, and reveals who is most confident about their financial future.
Reported by

Americans are trying to save despite having many other competing financial interests, according to a survey by Certified Financial Planner Board of Standards, Inc. (CFP Board).

CFP Board Consumer Advocate Eleanor Blayney notes, “An inability to start saving early, debt and stagnant incomes are just a few of the factors driving Americans’ financial anxiety.”

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

Nearly half (48%) of respondents say they “don’t always have enough money left over to save after bills.” More than one-third (35%) have seen a significant decrease in household income, and 34% say debt prevents them from saving.

In addition, 30% of respondents have experienced a job change in the past three years, and 20% have experienced a major medical expenditure.

Fifty-one percent believe credit card debt is the most important debt to pay off, followed by mortgages (36%) and student loan debt (19%).

About half (51%) save money regularly on a monthly basis, and more than one-third (36%) of respondents anticipate working in retirement. Only 35% utilize the services of a financial professional.

The survey includes a segmentation analysis that focuses on respondents’ propensity to save regularly and their general feelings toward money. The analysis found that Americans fall into four distinct categories:

Concerned Strivers – 27% of respondents

  • Concerned Strivers have high incomes, but still struggle to make ends meet due to financial demands, including mortgage debt, credit card debt and college payments.
  • Nearly all place a high importance on saving, but are concerned with their ability to save.
  • About half save money on a regular basis.
  • Nearly seven-in-10 have access to an employer-sponsored retirement savings plan.

Confident Savers – 22% of respondents

  • Confident Savers began saving for retirement around 25 years old.
  • Saving money is a top priority and they save money regularly on a monthly basis.
  • They feel confident about their financial future and retirement savings goals, and feel well prepared to make investment decisions.
  • Nearly eight-in-10 have access to an employer-sponsored savings plan.

Tentative Savers – 24% of respondents

  • Tentative Savers skew older than Concerned Strivers, but have similar levels of income.
  • Almost eight-in-10 save regularly on a monthly basis, but are still concerned about their ability to save.
  • Nearly two-thirds are not confident they are saving enough for retirement.
  • Seven-in-10 have access to an employer-sponsored retirement plan.

Stretched Worriers – 26% of respondents

  • Stretched Worriers are most likely to report being anxious about their financial futures.
  • They have been saving for retirement since age 35, on average.
  • This is the only segment where staying current on bills is a higher priority than saving.
  • Four-in-10 have access to an employer-sponsored savings plan.
The online survey was conducted May 13-16, 2016, of 1,000 adults 25 and older who are not unemployed or retired. A summary of the results can be found at www.cfp.net.

«