More Americans are lagging confidence when it comes to their financial security, thanks to rocky markets in 2023.
A recent Prudential surveyed 2,000 adults across generations, finding that 70% of Americans plan to retire, but aren’t sure if they ultimately will. Of those respondents, 40% say their primary concern is a lack of savings. Seven in 10 respondents said they feel behind on certain life goals that they were sure they’d reach by now.
One cause for the confidence lag includes an absence of effective planning: 26% of respondents in the Prudential survey said they never started preparing for retirement, and the fact that they haven’t will likely deter them from saving as a whole.
Going deeper into the research, respondents who never began preparing for retirement may have not had a robust understanding behind its importance in the first place. One in four respondents (28%) said they don’t have a strong understanding of retirement planning, and 59% have never even opened a 401(k) account. Of those who don’t have a 401(k), 21% have no idea how much money is stored away. Sixty-five percent of those surveyed don’t have or don’t know what an individual retirement account (IRA) is, and one in five Americans surveyed said they don’t plan to retire at all.
This isn’t the first time we’ve heard about a dip in confidence levels. Just last week, the Employee Benefit Research Institute (EBRI) reported that overall confidence in retirement savings fell for the first time since the 2008 recession, and days before that, Voya released research that found Black and Latino employees were likelier than all other demographics to experience lower levels of financial confidence.
Despite pointing to market uncertainty for the reason behind the confidence gap, Prudential says advisors and sponsors can help consumers retain their assurance by expanding access. According to the survey, respondents are willing to turn to their employers and advisors for help. Sixty-five percent of respondents said they would use online tools and resources if there was an opportunity to connect remotely with a financial advisor, and 62% said they would use these same tools if they could also connect with an advisor in person.
“To expand access is to take a more holistic approach when it comes to helping those achieve retirement,” Brad Hearn, president of Retail Advice and Solutions for Prudential, said in his report. “That approach includes technology, education, and products and solutions that actually meet the needs of consumers wherever they’re at in life.”
SEE ALSO:
- Workers and Retirees Report First Dip in Retirement Confidence Since 2008 Recession: EBRI
- Black and Latino Employees Experience Lower Levels of Financial Confidence: Voya
- Financial Confidence Remains Low Despite Smaller Recession Fears
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
