Data and Research

Several Factors Contribute to Lack of Retirement Preparedness

Just 62% of Americans feel confident they will retire comfortably, a survey found. 

By Javier Simon editors@plansponsor.com | March 13, 2017

As market volatility persists and a wealth of research indicates Americans would need to save more to retire comfortably, many are trailing behind. According to the latest Financial Freedom Survey by Capital One Investing, just 62% of Americans feel confident they will retire comfortably. That figure is down from 64%, which was recorded during the firm’s previous survey.

The new study found that a range of factors contribute to Americans’ retirement-planning flaws including lack of knowledge and experience (51%), distrust of the financial services industry (49%), and lack of pricing transparency (45%).

Moreover, inertia is preventing a large number of Americans from saving adequately for retirement. The survey found that although 65% are dedicating portions of their income toward retirement saving, only 49% have a long-term financial plan—highlighting Americans’ need for overall financial wellness and money-management skills. Meanwhile, 32% aren’t saving at all. And even though 39% believe people should be saving at least 15% of their income for retirement, only 13% are doing so.

The Capital One Investing study also offers some insight into how Americans are saving for retirement and their preferences for adviser interaction. The study found technology is a key factor in financial planning. Respondents value financial information aggregators (83%), retirement calculators (73%), technology to connect with advisers (71%), human-digital hybrid solutions (69%), and robo-advisers (56%).

"Today's investors need a combination of great digital tools and unbiased advice to navigate the markets and get on a path to action and confidence," says Yvette Butler, president of Capital One Investing. "We're committed to enabling smart investing habits by delivering straightforward, accessible tools and experiences that leverage the best of technology and human advice."

When it comes to extreme market volatility, however, the majority (74%) prefer human interaction with advisers. The degree to which investors would seek help from human advisers during times of heightened market volatility seems to vary among generations. Sixty-nine percent of Millennials said they would seek human interaction, while 75% of Generation Xers and 74% of Baby Boomers reported the same.

Capital One Investing’s latest Financial Freedom Survey was conducted with input from more than 1,000 adults ages 18 or older living in the continental United States. More information about the findings can be found at CapitalOne.com

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