Tags: retirement | peer pressure | senior citizens | savings

How Peer Pressure Can Help You Save For Retirement

Wednesday, 10 June 2015 02:28 PM

Peer pressure might start when you're a kid, but it can continue right into adulthood — and even affect your retirement savings.  

That's according to a new survey, which found that either financial stress, feeling behind peers in saving and salary, or embarrassment over finances motivated almost a third of non-retirees to "make positive financial decisions."

Thirty-seven percent of those taking the survey felt peers were ahead of them either in terms of financial stability, current income, or saving for the future. That feeling was particularly strong among Gen X-ers and millennials, with 48 percent and 43 percent, respectively, feeling they "lagged behind most people their age." Thirty-four percent of boomers felt the same way.

"For younger workers, everything's a constant stream of sharing about what's going on in their life and peers' lives," says Aron Levine, head of Merrill Edge, which commissioned the survey.

"If they don't seem to be doing as well as everyone else, they don't want to share it and it adds to stress." The good news, he says, is that this pressure "can lead to them taking some action because they don't want to fall that far behind peers." 

The biannual survey, done by Braun Research, asked a nationally representative sample of 1,000 of the “mass affluent” — people from 18 to 68 with between $50,000 and $250,000 in household investable assets—about topics such as how they were planning for retirement, what they thought retirement would be like, and whether they'd be embarrassed if close friends or family knew all about things like their retirement savings, checking account balance, credit score, or discretionary spending.  

The survey didn't ask respondents for details on the positive financial decisions they made, but found many more people prioritizing saving for the future. Sixty-one percent of respondents said they are now saving more for the future, compared with 48 percent who said that a year ago.

Respondents are now as likely to prioritize savings as they are to "having enough money to live comfortably today."

For millennials, part of the motivation to save is having seen the challenges their parents experienced in the past decade or so. Forty percent of 18- to 34-year-olds said that observing their parents’ successes or failures “influenced [them] to make a positive financial decision,” and 22 percent said a positive financial decision they made was influenced by social media.

The notion of retirement as a time to kick back and enjoy life isn't in great evidence among younger survey respondents. About three-quarters of Gen X-ers expect to feel financial stress in retirement, based on how much they’re saving now. Millennials aren’t far behind, at 67 percent.

A broad range of those surveyed cited unexpected healthcare costs as the biggest potential stress (65 percent), followed by a lack of funds from Social Security. A quarter of all participants cited taking a loan from their 401(k) plan as a future source of stress.

Forty-nine percent of pre-retirees plan to work in retirement, with Gen X-ers showing the highest percentage expecting to do that, at 52 percent, followed by millennials, at 43 percent.

And perhaps because millennials feel they can’t count on Social Security or a defined pension plan, they expect to look closer to home if they need financial help in retirement. Forty-three percent say they’re counting on help from current or future children, family, or close friends. That held true for only 9 percent of all other respondents.

No, not many millennials are sitting on $50,000 pots of money. To get representation of "mass affluent" millennials — which may be a contradiction in terms, unfortunately — the 18- to 34-year old millennials surveyed had to have either that $50,000 to $250,000 in investable assets or have investable assets of between $20,00 and $50,000 and a salary of at least $50,000. 

© Copyright 2020 Bloomberg News. All rights reserved.


   
1Like our page
2Share
Personal-Finance
Peer pressure might start when you're a kid, but it can continue right into adulthood — and even affect your retirement savings.
retirement, peer pressure, senior citizens, savings
630
2015-28-10
Wednesday, 10 June 2015 02:28 PM
Newsmax Media, Inc.
 
Newsmax TV Live

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved