The FINANCIAL — Over two-thirds (68 percent) of New Jersey respondents expect to be stressed about finances 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 despite feelings of stress from area pre-retirees, New Jersey retirees show a worry-free retirement is possible, with the vast majority (85 percent) reporting they will have enough money for the rest of retirement, based on how they were able to save.
Part of a biannual nationwide survey, the study explores the opinions of New Jersey residents with investable assets of $50,000 to $250,000 and finds that anticipation of a financially difficult retirement is driving pre-retirees to save more now for their years ahead. Although more than half (64 percent) of New Jerseyans say that having enough money to live comfortably today is important, an even larger majority (67 percent) of New Jersey residents cite that saving more for the future is a priority right now.
“It’s clear that many New Jersey residents are somewhat stressed about having enough money in retirement – but generally speaking, they are preparing financially now for their golden years ahead,” said Ray Tenpenny, regional sales manager at Merrill Edge. “Retirees across the state are leading by example, demonstrating that preparation pays off, and so does saving and investing early.”
Pursuing an ideal retirement without financial stress
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). New Jersey respondents who have yet to reach retirement are taking actions to get there like today’s retirees, but could do more to emulate strategies that retired Americans employed to ensure that their golden years were less worrisome:
Today, the most popular actions that non-retired New Jersey residents are taking to live a stress-free retirement are funding retirement accounts (58 percent) and paying off debt (56 percent). Contributing to a retirement account (63 percent) and paying off debt (55 percent) were also some of the most common measures that retirees took to reduce strain in retirement before reaching that stage.
However, more than one-third (37 percent) of New Jersey retirees preemptively invested as much as they could outside of a retirement account to be stress-free when they did retire, and only 27 percent of non-retired area survey respondents are doing this with the same goal in mind.
Similarly, only 27 percent of New Jersey respondents who have yet to reach retirement are investing in a non-retirement account to reduce stress; whereas, nearly four in 10 (37 percent) area retirees proactively invested as much as they could outside of a retirement account in advance of their golden years.
Financial fears lead to positive financial actions
According to the survey, while the majority of non-retired New Jerseyans are actively investing for retirement, 39 percent of residents would still be embarrassed if their close friends or family knew intimate details surrounding their finances, including their retirement savings (21 percent) and checking account balance (19 percent).
Along similar lines, 20 percent of New Jersey respondents feel that they lag behind their peers in terms of financial stability, saving for the future or current income. However, those shortfalls also appear to be a catalyst for better financial planning. New Jersey retirees and non-retirees alike have felt motivated to make positive financial decisions due to financial stress (23 percent) and financial successes or failures of their parents (11 percent).
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