Millennials Reshaping Path to Retirement

Millennials’ perspective on their later years and how to get there hints at a possible redefining of retirement, according to the latest Merrill Edge® Report. Nearly half (41 percent) of the generation surveyed expects to retire when they hit a certain financial milestone or savings goal, whereas their older counterparts are focused on leaving the workforce when they hit a certain age or can no longer work due to health concerns.

This Smart News Release features multimedia. View the full release here: http://www.businesswire.com/news/home/20160418005910/en/

Spring 2016 Merrill Edge Report - Retirement Drivers

Spring 2016 Merrill Edge Report - Retirement Drivers

The survey of more than 1,000 mass affluent Americans reveals that the largest generation in today’s workforce has a different view on retirement, alluding to a potential shift of the life milestone in the years to come. For millennials, retirement is more than a time for rest and relaxation – it’s a time full of possibilities.

The majority (53 percent) of millennials view retirement as the start of something exciting. In comparison to their elders, 21 percent of millennials are more likely to make pursuing a passion (10 percent), furthering their education (7 percent) or starting/growing their own business (4 percent) their priorities in retirement.

Also looking toward the future, 47 percent of millennials believe the outcome of the 2016 presidential election will have a positive impact on their long-term financial goals, higher than any other generation.

“It’s refreshing to see the mindset around retirement evolve, particularly a strong optimism and a goal-oriented approach from younger generations,” said Aron Levine, head of Merrill Edge at Bank of America. “This focus is a great start, but one of the keys to a successful retirement is to ensure savings are prioritized early and often. Year over year, we continue to see today’s non-retirees struggle with the impact short-term spending has on their long-term financial future.”

Savings shortcomings

While millennials are taking a goal-oriented approach toward their retirement, they align with Americans overall in thinking they could be more proactive. Nearly half (48 percent) of Americans say they are most insecure about some aspect of their finances (financial future, retirement savings or income), with retirement savings (21 percent) being one of their top insecurities, ahead of their personal relationships (10 percent), judgment of others (6 percent) and career path (4 percent).

Americans also cite that daily expenses in retirement will dominate their financial future (28 percent), more so than managing health care expenses (17 percent) and housing expenses (17 percent).

And, despite these strong sentiments, they still don’t seem to prioritize retirement savings. When asked how proactive they were about planning for retirement, nearly two in five (38 percent) award themselves a grade of “C” or lower and only 18 percent give themselves an “A.”

“It has become increasingly apparent that retirement planning is not only evolving, but also has become a moving target that Americans must continuously revisit to pursue their goals and priorities,” said Ken Dychtwald, Ph.D., founder and CEO of Age Wave. “As we see in the latest Merrill Edge Report, retirement planning requires a new mentality – ‘set it and forget it’ is a thing of the past. As millennials are envisioning living very long lives, this study reveals the new priorities they have for work, leisure, success and money as they are coming to realize that everything they do today, financially speaking, can impact the lives they’re hoping to live in retirement.”

Retiree realities

These savings shortfalls may be indicative of the retirement today’s retirees are living. When asked what they have done in retirement that they didn’t expect to, retirees’ top response was “spent more money than anticipated” (30 percent), followed by “moving to a new location” (19 percent) and “feeling a lack of purpose” (18 percent).

Top priorities of retirees also seem to differ from those of non-retirees. The retirees’ top priorities include maintaining their standard of living (29 percent), followed by spending time with loved ones (27 percent) and maintaining their health (23 percent). Despite that nearly one in five non-retirees hope to make traveling the world their top retirement priority, only 5 percent of retirees have prioritized traveling.

“Today’s retirees tell us they are experiencing a very different retirement than non-retirees are envisioning,” said Levine. “With continuing savings challenges and potential economic uncertainties ahead, non-retirees should have a plan in place and regularly revisit it to make sure it still aligns with what’s most important to them for their retirement years.”

For more in-depth information about the financial behaviors and priorities of mass affluent Americans, read the entire Spring 2016 Merrill Edge Report here. A complementing infographic is available here, and a video is available here.

Merrill Edge Survey Methodology
Braun Research, Inc. conducted a nationally representative telephone survey on behalf of Merrill Edge. The survey was conducted from February 12 through March 1, 2016, and consisted of 1,003 mass affluent respondents throughout the U.S., defined as individuals with investable assets (value of all cash, savings, mutual funds, CDs, IRAs, stock, bonds and all other types of investments excluding primary home and other real estate investments). Respondents in the study were defined as aged 18 to 34 (millennials) with investable assets between $50,000 and $250,000 or those aged 18 to 34 who have investable assets between $20,000 and $50,000 with an annual income of at least $50,000; or aged 35-plus with investable assets between $50,000 and $250,000. We conducted an oversampling of 300 mass affluents in the following markets: San Francisco; Los Angeles; Orange County, California; Dallas; New Jersey; South Florida; Chicago; Atlanta; and Phoenix. The margin of error is +/- 3.0 percent for the national sample and about +/- 5.7 percent for the oversample markets, all reported at a 95 percent confidence level.

Merrill Edge
Merrill Edge is a streamlined investment service that provides access to the investment insights of Merrill Lynch and the convenience of Bank of America banking. With Merrill Edge, clients can view their Merrill Edge investment and Bank of America bank accounts on one page online. They also have access to easy-to-use tools, actionable insights, one-on-one guidance and competitive pricing for online trades. If clients prefer to receive advice and guidance to pursue and track financial goals, Merrill Edge Roadmap® allows them to work one-on-one with a Merrill Edge Financial Solutions Advisor to develop a personalized action plan and receive specific investment recommendations tailored to them and their personal goals.

Bank of America
Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 47 million consumer and small business relationships with approximately 4,700 retail financial centers, approximately 16,000 ATMs, and award-winning online banking with approximately 33 million active users and approximately 20 million mobile users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

Visit the Bank of America newsroom for more Bank of America news, and click here to register for news email alerts.

www.bankofamerica.com

Banking products are provided by Bank of America, N.A., and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation.

Merrill Edge® is available through Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S), and consists of the Merrill Edge Advisory Center (investment guidance) and self-directed online investing.

MLPF&S is a registered broker-dealer, Member SIPC and wholly owned subsidiary of Bank of America Corporation.

Investment products:

Are Not FDIC InsuredAre Not Bank GuaranteedMay Lose Value

Neither Merrill Lynch nor any of its affiliates or financial advisors provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.

© 2016 Bank of America Corporation. All rights reserved.

Contacts:

Reporters May Contact:
Kristen Georgian, Bank of America, 1.617.434.0234
kristen.e.georgian@bankofamerica.com

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.