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Schwab Poll: Saving for Retirement Top Cause of Financial Stress

Schwab Poll: Saving for Retirement Top Cause of Financial Stress

(Dollar Photo Club)

By    |   Wednesday, 10 August 2016 02:48 PM

Charles Schwab’s survey of 1,000 workers and 401(k) participants nationwide found that saving for retirement is the leading source of financial stress for people of all ages.

Schwab Retirement Plan Services Inc. said the vast majority think retirement should be a prominent issue in the upcoming presidential campaigns, though they’re pretty evenly split on which candidate will be better for their economic security.

“With so many competing obligations and priorities, it’s natural for people to worry about whether they’re saving enough for retirement,” said Steve Anderson, president, Schwab Retirement Plan Services, Inc. “Roughly nine out of ten respondents told us they are relying mostly on themselves to finance retirement. It’s encouraging to see people of all ages taking responsibility for their own future and making this a top priority,” he said.

Highlights of Schwab's research include:

  • Saving for retirement is the leading cause of financial stress – even for young people.
  • Saving for retirement is the top source of financial stress for survey respondents – even more than job security, credit card debt or monthly expenses. Millennials admit they worry more about saving for retirement than paying off student loans!
  • Only 43% of respondents know how much money they need for a comfortable retirement – significantly lower than awareness of other important “target numbers” like ideal credit score, weight or blood pressure.
  • An overwhelming majority consider retirement a major public policy issue, but they are split over which presidential candidate would be better for their own pocketbook (Clinton 52% vs. Trump 48%).
  • 401(k) plans underpin retirement savings, but merely participating is not enough.
  • Most say a 401(k) is either their only or largest source of retirement savings.
  • 90% consider the 401(k) a must-have benefit and would think twice before accepting a job that didn’t offer one.
  • One-third aren’t saving more because they don’t want to sacrifice things that add to their quality of life, like vacations or dinners out.
  • We’re not our own doctor, we’re not our own mechanic – and most people think they shouldn’t be their own investment advisor either.
  • 70% want professional, personalized 401(k) investment advice.
  • 74% say they would be very or extremely confident in their ability to make the right 401(k) investment decisions with the help of a financial professional – only 44% would feel that same level of confidence on their own.
  • 85% would be interested in using a broader financial wellness program if it were offered by their employer

“People look at retirement savings as part of their overall financial picture,” added Anderson. “Employers are in a unique position to address the needs of their employees more holistically. An increasing number of employers now recognize that a workplace financial wellness program can not only help alleviate the financial stress employees feel, but it can also increase retention, loyalty and engagement.” 


Meanwhile, a recent study from Australia has found that worries about retirement do have merit and that enjoyment of everyday activities increases after retirement.

The heightened level of enjoyment lasts at least a year after a retiree stops working full time, researchers report in the journal Age and Ageing.

There is conflicting evidence about changes in enjoyment and happiness when people retire, co-author Tim Olds of the University of South Australia told Reuters Health.

On the one hand, people may lose social connections and their sense of purpose in life when they retire, he said. On the other hand, retirement offers a chance to do the things you've always wanted to do. “We found that you're likely to be happier when you retire,” he told Reuters Health in an email.

That’s not because retirees spend more time doing things they like and less time doing things they don't like, Olds noted.

Rather, it could be that retirees get more pleasure from even mundane daily activities “because they have more autonomy and time-flexibility,” Olds said.

The 124 study participants all intended to retire within three to six months. The group was roughly half men and half women, with an average age of 62.

At the start of the study and again three, six and 12 months afterward, Olds and his colleagues asked participants to recall their activities in the last 24 hours. They grouped activities into eight categories: physical activity, social, self-care, sleep, screen time, quiet time, transport, work and chores.


Participants also completed surveys about their health, well-being, sleep quality and loneliness.

Compared to pre-retirement levels, average enjoyment ratings were significantly higher throughout the study. “Changes were partly due to shifts towards more enjoyable activities . . . but were mainly due to retirees getting more enjoyment out of doing the same activities post-retirement,” the authors found.

Overall, enjoyment ratings were associated with well-being and better sleep quality.

Physical activity and social activity had the highest enjoyment ratings while work and chores had the lowest, according to the report.

Still, participants who continued to work part-time after retirement reported that their enjoyment of it increased substantially, the authors noted.

“People have a different experience when working after retirement,” said Kenneth Shultz, a social gerontologist and professor of psychology at California State University in San Bernardino. “You don’t have to deal with the pressure of a career job, and people tend to not be emotionally invested in it,” said Shultz, who was not part of the study.

(Newsmax wire services contributed to this report).

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Charles Schwab's survey of 1,000 workers and 401(k) participants nationwide found that saving for retirement is the leading source of financial stress for people of all ages.
schwab, retirement, saving, young
Wednesday, 10 August 2016 02:48 PM
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