Midterm Election Night Survey: Even with Booming Economy, Consumers Are Not on Track to Retire on their Terms
On the night of the 2018 midterm elections, CFP Board conducted a survey in collaboration with research-led consulting firm Heart + Mind Strategies which found that even during a vibrant economy, a majority of American voters were less confident about their retirement prospects than they were five years prior.
Key findings demonstrate high level of consumer uncertainty about retirement
The study, which surveyed more than 1,000 American voters, showed that despite the strong economy:
- More than 60 percent of working voters feel it is now harder to retire on time than it was five years ago
- The majority (58 percent) predict it will remain difficult to retire on time five years from now
- While almost two-in-three (62 percent) are confident in their ability to maintain their savings as they transition to retirement, less than half (45 percent) think their savings will last them through retirement.
"By 2060, there will be more than 98 million Americans who are 65 or older," Kevin Keller, chief executive officer of the CFP Board, said in a press release announcing the results of the survey. "People are also living longer than ever before. In many cases, retired Americans will need to support themselves for 10, 15, 20 or even 30 years, meaning people need to save earlier, save more and be better prepared for the financial challenges of retirement.”
"People are also living longer than ever before. In many cases, retired Americans will need to support themselves for 10, 15, 20 or even 30 years, meaning people need to save earlier, save more and be better prepared for the financial challenges of retirement.”
— cfp board ceo kevin Keller, cae
Unfortunately, it seems many Americans are struggling to turn this advice into a reality. Two-thirds of those surveyed have less than $100,000 in household financial assetsoutside of their primary residence, resulting in American voters’ doubts about having enough savings to last comfortably throughout retirement.
Not all bad: Americans are more active about planning, show desire to work with an advisor
However, there was a silver lining visible in the results: today’s political climate and the current state of affairs in the United States is positively impacting Americans’ perspective when it comes to managing their finances. One-in-three Americans said they are now much more proactive about setting and following a financial plan.
Other positive highlights from the survey highlighted consumers preferences when it comes to financial advisors:
- While many consumers aren't working with a financial adviser, 60% of consumers are likely to work with an advisor for their retirement needs.
- 82% of consumers want a financial adviser who can provide a comprehensive plan that takes their holistic financial situation into consideration.
Americans are waiting too long to begin planning for retirement
But despite these consumer preferences, most Americans only start planning for retirement five or 10 years before retirement. "So that's a big problem that we see," said Keller during a December 2018 episode of TheStreet’s Retirement Daily podcast covering the survey results. "And so that conflict, I think, just only exacerbates a problem if somebody hasn't started planning for retirement. If you wait for the last minute. Time can cure a lot of mistakes. And we've all made those financial mistakes. So, time can cure that, but you have to start as soon as possible."
Later in the interview, Keller commented on the study’s finding that many Americans would look to a financial adviser to provide a comprehensive financial plan.
"Frequently, people, they might have somebody that they work with on insurance, and somebody they work with on investments. But they should have somebody in their life who is working, who is looking across to all sectors of their financial life."