Research Studies

Americans juggle multiple financial goals through various life stages, but it can be a challenge for many to strike a balance between pursuing short-term needs and wants while saving for the future. People of all ages and incomes make lifestyle choices that affect their immediate financial situation — and often these decisions have long- term effects.

We conducted the Financial Trade-Offs study among three generations of Americans to discover which financial needs and goals they prioritize, and which trade-offs they consciously make to meet these goals. What we found is that most people say they are generally willing to make trade-offs today in order to save for tomorrow. However, their financial actions — and the bills they have yet to pay — suggest they may not always be thinking about what will have the biggest long-term impact.

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For the fourth consecutive year, Ameriprise Financial polled Americans in the 30 largest U.S. metropolitan areas to determine their retirement readiness. The New Retirement Mindscape® 2013 City Pulse index measures American consumers’ preparation for and confidence about retirement by asking them about their savings habits and expectations for their financial futures. Along with taking the nation’s pulse on financial preparedness and attitudes, the survey also explores the activities people intend to pursue during retirement. Metro areas are then ranked against one another to determine which American cities are most or least ready for retirement.

The data compiled over four years also helps identify meaningful changes from year to year. This provides an indication of how local and national developments may come into play in determining the degree to which individuals feel ready for retirement.
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Recent research from various sources has uncovered an alarming trend in financial planning in America: As a whole, Americans nearing retirement are underprepared. An October/November 2012 survey of people ages 50–70 shows that fewer than half (46%) report feeling extremely or very confident that they’ll be able to afford the essentials in retirement. Their concerns may be valid. The same study uncovered a gap of approximately $250,000 between what respondents think they need to retire comfortably and what they’ve set aside for their time post-career.

Less studied are the reasons why Americans are so ill-equipped to fund this major life stage. What events have transpired to make retirement financially burdensome even for those who have long planned their exit from the workplace?

The Retirement Derailers® survey conducted in February 2013 explores this question. The results identify unexpected life events, or derailers, that can be culprits in disrupting plans for retirement. The study also reveals the gravity of these events, which have cost Americans an average of $117,000 in savings, and examines how respondents view this shortfall in the context of their overall preparation for retirement. Finally, it highlights how individuals in these situations plan to get their retirement savings back on track.
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