New Capital Group Study Uncovers Strategies to Help Investors Better Prepare for Retirement During Economic Uncertainty
LOS ANGELES, March 30, 2021 /PRNewswire/ -- As COVID-19 continues to drive economic uncertainty, Americans are facing critical choices about how to invest and approach a financially secure retirement. A new survey conducted by Capital Group, home of American Funds, and one of the world's leading investment management firms, finds that investors of all ages may lack the confidence, knowledge and resources needed to do just that.
The research analyzes the sentiments and behaviors of 1,215 American adults amid the ongoing pandemic. While nearly 9 out of 10 investors find the predictability of a monthly "retirement paycheck" appealing, notable gaps in financial education, investment confidence and employer resources may be preventing them from realizing this goal.
"People envision a life of predictability and simplicity after retirement. This may be why the consistency of a monthly retirement paycheck is so appealing to investors," said Toni Brown, senior vice president and head of retirement strategy for Capital Group. "But as the pandemic has shown, our expectations are all too often disrupted by reality. Helping investors realize the goal of a retirement paycheck is anything but straightforward, and plan sponsors and financial advisors have an important opportunity to educate them on how to get there."
Perception versus reality
Gen Xers have the least confidence in their retirement prospects, with 37% not at all confident they will reach their goals. Millennials, on the other hand, are more likely than other age group – and significantly more likely than Gen Xers – to be confident, with 74% of millennials confident they'll achieve their retirement goal.
However, despite investors' overall confidence in their abilities to reach their retirement goals, the survey found wide disparities across investors in terms of what they consider "real money" in their retirement accounts, versus the amount they'd like to have saved when they retire.
When asked to envision the amount of money in a retirement savings account that would begin to feel like real money and make a difference in their lives, the research revealed:
In fact, while investor preference for the predictability of a retirement paycheck is clear, more than a quarter of investors (28%) have failed to consider what they'll do with their money after they retire — including a third of Gen Xers (32%), and a quarter of baby boomers (24%) who are much closer to retirement.
For additional information and the full report, click here.
About Capital Group
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Chris Thonis, Golin
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SOURCE Capital Group