As market volatility rolled through 2022 and into 2023, new findings from Schroders show how inflationary environments influenced savings and investment decisions for working adults.
The Schroders 2023 US Retirement Survey found a fear of losing money heavily impacted how working adults were allocating assets into retirement savings. Twenty-nine percent of workers ages 45 and older said they allocated cash towards retirement investments, while 33% of working Millennials did the same. Sixty-six percent of adults ages 45 and over said they allocated cash because they were afraid of losing too much money if the stock market goes down, compared to 62% of Millennials.
The findings come as more working adults say they’ll need at least a million dollars to retire comfortably, even as barely a quarter believe they’ll reach that goal. Fifty-nine percent of Americans ages 45 and over said they expect to save less than $500,000, including 34% with less than $250,000. Meanwhile, 49% of Millennials anticipate saving less than $500,000, with 27% expecting to save less than $250,000.
Workers over age 45 and Millennials were mainly aligned with their asset allocations overall, including on equites (31% of workers over aged 45 vs. 31% of Millennials), fixed income (16% vs. 16%), and target-date funds (TDFs) (13% vs. 14%).
Millennials worry the most about money
With Millennials expected to make up most of the workforce in the years ahead, it’s no wonder that most face financial anxiety as they reach their peak earning years. Eighty-five percent of Millennials surveyed said they worry about money every day, averaging at 1.9 hours a day, 13 hours a week, and 28 full days a year.
This compared to 69% of workers ages 45 and up, who averaged at 1.6 hours a day, 11 hours a week, and 24 full days in a year.
Millennials were also slightly likelier to experience anxiety, loss of sleep, and health concerns over their financial stress. Sixty-four percent of Millennials say they are concerned that financial stress will negatively impact their overall health, 55% say the 2022 stock market greatly increased their anxiety, 49% have lost sleep worrying about their finances, 48% said their workplace retirement plan performance in 2022 was anxiety-inducing, and 64% with a workplace retirement plan are worried their investments won’t grow to the level they hoped to achieve.
SEE ALSO:
- How Bad Inflation is Hurting Retirement Saving: By the Numbers
- Inflation Causing Participants to Struggle with Finances, Mental Health
- As Inflation Continues, Workers Look for ‘Care’ in Employee Benefits
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.
