Ameriprise Study: Investors Across Five Decades Feel Confident About Their Financial Journey, Despite Setbacks and Fears
The study, which surveyed more than 3,000 Americans ages 30 to 79, reveals the top financial setback for individuals in their 30’s-40’s is a job loss or career issue, while market loss is the leading derailer cited by older respondents. Though most respondents (62 percent) have fully recovered from these events, they’re still afraid of potential bumps down the road. For example, younger respondents (in their 30’s-40’s) say their biggest financial fear is job loss, while those who are older most fear health challenges.
“Investors at various ages and stages of life who are taking action to manage their money feel financially confident despite the obstacles they’ve faced,” says Marcy Keckler, vice president of Financial Advice Strategy at Ameriprise Financial. “While everyone has unique goals, needs and challenges that change throughout their lifetime, an important factor remains the same - planning for both today and tomorrow reinforces their sense of security and their long-term financial success.”
A Positive Look Forward
It is clear investors aren’t letting fear overshadow how they feel about their finances. Only 7 percent say they feel “stressed,” which isn’t surprising given most respondents (78 percent) report having more than enough money to cover essential expenses. Also, the majority (78 percent) say they’re doing better financially than others their age. When asked what financial success means to them, “having a sense of security” is mentioned most often followed by “being able to provide for my family.”
Steps toward Success
Even though all respondents have achieved the milestone of at least $100,000 in investable household assets, a third (34 percent) have a household income below $100,000, underscoring the proactive approach they’ve taken to saving and investing their money. Living within their means is the leading factor respondents credit for their financial situation. Additionally, most people (75 percent) say they’re diversifying investments and 61 percent say they’re paying down debt. The majority (66 percent) also take advantage of retirement accounts such as 401(k)s and started participating early— 55 percent started in their 20’s.
Major Milestones and Financial Goals
The Ages, Stages & Money study reveals that age has a lot to do with the personal milestones investors say had the biggest financial impact on them over the last five years. For those in their 30’s buying a home tops the list, while starting/changing jobs is number one for those in their 40’s. Supporting their children’s accomplishments is the top milestone for those in their 50’s; respondents in their 60’s and 70’s cite retirement. Across every age group, respondents align on their number one financial goal for the near future: achieve a point where they no longer have to worry about money.
Financial Life Stages
Interestingly, age seems to be less of a factor when people identify which financial life stage best describes their situation. Rather, the Ameriprise study reveals investors view their current financial stage through the lens of the financial priorities they are currently focused on managing. Only 17 percent of respondents say they are in the early stage, 48 percent identify with the middle phase and 35 percent say they are in the later period:
- Asset Accumulator - In the early financial stage, investors are looking to balance accumulating financial assets with managing debt. Nearly half of respondents in their 30’s (49 percent) and a quarter in their 40’s categorize themselves as Accumulators. Roughly 10 percent of respondents older than 50 identify with this life stage.
- Asset Maximizer - In the middle stage, optimizing savings and investments is a priority. Maximizers have accumulated a reasonable amount of assets and are focusing on growing assets in retirement accounts and achieving other long-term goals. A substantial mix of investors across all age groups say they’re in this stage: 30’s (51 percent), 40’s (73 percent), and 50’s (75 percent) identify themselves as an Maximizer. And 31 percent in their 60’s identify with this stage.
- Asset Sustainer - In the later financial stage, investors have achieved retirement and their priorities include determining draw-down strategies and adjusting investments to make their money last. The majority of people in their 70’s (90 percent) and 60’s (67 percent) identify with this stage, while 17 percent of people in their 50’s say they’re in this stage.
Regardless of age, certain decisions have the potential to hinder investors’ financial futures. Nearly a quarter (23 percent) of respondents who have a 401(k) or other retirement account admit to borrowing or taking an early withdrawal from it. This move can have a lasting impact on investors’ retirement plans and subject them to tax penalties. Fortunately, the vast majority who took a loan (93 percent) say they’ve paid it back. While health issues top the list of the biggest financial fears for most respondents, few are preparing for this challenge. Only 28 percent have long term-disability insurance and a quarter have long-term care insurance.
“Even investors who have a good handle on managing their money have opportunities to strengthen their financial future. An advisor can be an important resource to help you navigate different life stages, avoid mistakes and address hiccups along your financial journey,” says Keckler.
For more information about the study, please visit our research page at Ameriprise.com/ages
About the survey
The Ages, Stages & Money study was created by Ameriprise Financial, Inc. and conducted online by Artemis Strategy Group December 8-21, 2017 among 3,019 U.S. adults between the ages of 30-79 with at least $100,000 in investable assets. For further information and details about the study, including verification of data that may not be published as part of this report, please contact Ameriprise Financial or go to Ameriprise.com/ages.
About Artemis Strategy Group
Artemis Strategy Group (www.Artemissg.com) is a communications strategy research firm specializing in brand positioning, thought leadership and policy issues.
About Ameriprise Financial
At Ameriprise Financial, we have been helping people feel confident about their financial future for more than 120 years. With extensive asset management, advisory and insurance capabilities and a nationwide network of approximately 10,000 financial advisors, we have the strength and expertise to serve the full range of individual and institutional investors' financial needs. For more information, or to find an Ameriprise financial advisor, visit ameriprise.com.
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