Get married and save. That appears to be the message from new research from Mintel. The population of single adults is increasing, comprising a larger percentage of households than ever before, partially due to a trend in consumers staying single longer. However, Mintel’s Retirement Planning US 2015 report reveals that only half of U.S. singles (51 percent) have a retirement savings account, compared to seven in 10 (68 percent) of those living with a partner and a full 84 percent who are married.
Mintel data shows consumers have begun to take retirement saving more seriously. The percentage of households that have a retirement plan is 72 percent, up from 65 percent in 2013. However, most Americans are not as involved in saving for retirement as they could be. Only three in 10 (30 percent) adults save the most they can afford to save for retirement, with just 27 percent contributing the maximum allotment to their plan. Furthermore, nearly one-quarter (22 percent) of consumers who have an employer-sponsored plan contribute only enough to get the employer match.
“More Americans are staying single longer and our data shows this trend will hold out for the foreseeable future. Millennials, in particular, are choosing to stay single longer, establishing households either alone or with a partner without feeling the need or desire to get married. Because they are young, however, they may be hesitant to start saving for retirement. By postponing saving they are losing the benefit of time which allows their savings to accumulate and grow,” said Robyn Kaiserman, Financial Services Analyst at Mintel. “Whether consumers are heeding lessons learned during the recession, have more money to save, or more are working for employers who offer plans, we’re finding that Americans have begun to take retirement saving more seriously.”
Confidence in Social Security is low, yet few are prepared
According to Mintel research, few Americans (25 percent) are confident that Social Security will be there for them when they retire, with confidence especially low among Millennials (20 percent) and Gen X (14 percent). However, even fewer are saving enough as only 24 percent of adults feel they are on target to have enough money to comfortably retire when the time comes. This indicates that most consumers believe they are likely to experience a shortfall once they retire. In fact, consumer confidence in the ability to comfortably retire seems to be decreasing, as data from Mintel’s Consumer Attitudes toward Retirement Planning US 2013 report shows that 36 percent of consumers believe they were on target to retire at age 65 or before. There is some good news, however, with three in 10 (27 percent) adults saying they are making financial sacrifices now in order to save for retirement.
Plan confusion is the top barrier to saving
Above all else, consumers are concerned that they do not understand how their retirement plan works (65 percent). For example, more than half (56 percent) don’t understand the investment options available to them. Another problematic issue is that more than half of respondents who are parents believe that saving for their children’s education is more important than saving for retirement (56 percent).
Other barriers to retirement savings center on concerns with handling money and vary by generation. More so than older generations, Millennials (45 percent) and iGeneration (43 percent) believe they would be saving more for retirement if they had an adviser to help them. Many, including Gen X, already know they should be saving more, but aren’t either because they can’t afford to (61 percent) or because they haven’t gotten around to it yet (49 percent).
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With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
