Do You Know Your Clients’ Financial Concerns? It’s Not Just Retirement

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The Retirement Confidence Survey (RCS) is the longest-running annual retirement survey of its kind in the United States. It gauges the views, experiences, attitudes and expectations of Americans regarding retirement preparation and related issues.  Therefore, this yearly report is a great resource for financial planners to gain insight into their clients’ and prospective clients’ evolving perspective of this major life transition.

The 2012 RCS is the 22nd annual wave of this project, making it possible to track retirement planning behaviors and concerns over time. Of particular interest in recent years is the affect of the slow economic recovery on the level of confidence Americans have regarding their long-term financial outlook.

Outlook for a (Un)comfortable Retirement?
Americans’ confidence in their ability to retire comfortably dropped to a record low in 2011; and, despite significant improvements to the economy, their outlook did not improve this year. In 2012, only 14 percent of workers are very confident that they will have enough money to live comfortably in retirement.

Likewise, confidence about other financial aspects of retirement has remained relatively unchanged since declining from record highs in 2007. For example, only 26 percent of workers are now very confident that they will have enough money to pay for basic expenses during retirement as compared to 40 percent in 2007.

In addition, the percentage of workers who are very confident about being able to pay for medical expenses continues to remain low at 13 percent, down from 20 percent in 2007.

More Immediate Concern: Job Security
One reason that retirement confidence may have stagnated is that many Americans are preoccupied by more immediate financial concerns. When asked to name the most pressing financial issue facing most Americans today, 42 percent of workers cited job uncertainty.

In addition, 20 percent of workers reported their level of debt is a major problem. Not surprisingly, this finding demonstrates a strong relationship to level of retirement confidence.  For example, 45 percent of workers with a major debt problem indicated they are not at all confident about having enough money for a financially secure retirement as compared with 14 percent of workers without a debt problem.

Other financial issues named include:

  • Making ends meet: 10 percent
  • The economy: 9 percent
  • Making mortgage payments: 9 percent
  • Paying down debt or loans: 8 percent
  • Paying for health insurance or medical expenses: 7 percent

In contrast, just 2 percent of workers and retirees identified a longer-term issue, such as saving or planning for retirement, as the most pressing financial issue facing most Americans today.

Note: The 2012 Retirement Confidence Survey was sponsored by the Employee Benefit Research Institute, the American Savings Education Council and Mathew Greenwald & Associates.

 

Carol Anderson
President
Money Quotient
Poulsbo, Wash.

One thought on “Do You Know Your Clients’ Financial Concerns? It’s Not Just Retirement

  1. Pingback: Do You Know Your Clients’ Financial Concerns? It’s Not Just Retirement « Money Quotient Blog

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