The FINANCIAL — About two-thirds (66 percent) of Chicago respondents expect to be stressed about money in retirement based on how they are currently saving, according to a new survey released on June 9 by Bank of America and Merrill Edge. The latest Merrill Edge Report reveals that while non-retirees are anticipating stress, the majority (53 percent) of retirees in the area are not stressed based upon how they saved.
Despite predicting stress, nearly six in 10 (59 percent) Chicago respondents believe they will have enough money in retirement due to how they are saving for it, while the vast majority (85 percent) of retired respondents say they will have enough money for the rest of retirement based on how they saved leading up to their retired years.
“Many Chicagoans are concerned about financial stability in retirement, however many current retirees feel they will have enough savings for the rest of their retirement based on how they saved,” said David Bader, regional executive at Merrill Edge. “The majority of retired respondents saved for retirement prior to their golden years, which goes to show that having a financial strategy pays off in the future.”
Pursuing an ideal retirement without financial stress
Part of a biannual nationwide survey, the study explores opinions of Chicago residents with investable assets of $50,000 to $250,000 and finds that despite stress over future retirement, area respondents are still prioritizing living comfortably today (67 percent), as opposed to saving more for the future (58 percent).
Nationally, the Merrill Edge Report finds most non-retired respondents agree that an ideal retirement is one that is not spent worrying about money (77 percent) and is overall stress-free (70 percent). Chicagoans who have yet to reach retirement are taking actions to get there like today’s retirees, but could do more to emulate strategies that retied Americans employed to ensure their retirement years were less worrisome:
Today, the most popular actions that non-retired Chicago residents are taking to live a stress-free retirement are funding a retirement account (58 percent) and paying off debt (56 percent). Contributing to a retirement account (68 percent) and paying off debt (66 percent) were also some of the most common measures that retirees took to reduce strain in retirement before reaching that stage.
However, more than four in 10 (45 percent) area retirees preemptively worked with a financial advisor to be stress-free when they did retire, and only 39 percent of non-retire area respondents are doing this with the same goal in mind.
Similarly, only 30 percent of Chicago respondents who have yet to reach retirement are investing in a non-retirement account to reduce stress; whereas, nearly one-third (32 percent) of area retirees proactively invested as much as they could outside of a retirement account.
Financial fears lead to positive financial actions
While many Chicagoans are taking clear steps to prepare for retirement, the survey found that many respondents would still be embarrassed if their friends or family saw the amount of their retirement savings (15 percent) or their checking account balance (15 percent).
Similarly, 14 percent of retirees and non-retirees alike feel they lag behind their peers financially whether in earnings, savings or overall stability. However, these shortfalls also appear to be a catalyst for better financial planning. Respondents have felt motivated to make positive financial decisions due to the successes and failures of their parents (28 percent) and overall financial stress (24 percent).
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