Pre-retirees send message to younger generations: Start saving in your 20s and put it on auto-pilot.
Nearly half of pre-retirement Americans find it difficult to save anything beyond what they’re automatically putting away.
Many wish they had used more automatic savings options to build their nest egg.
7 in 10 pre-retirees regret their late start to saving and wish they had focused sooner.
The magic age for saving seriously? 26 years old.
NEW YORK, August 31, 2015—Pre-retirees report a high level of confidence when their savings are on auto-pilot through automated vehicles including direct deposit into a 401k plan, a mortgage, or permanent life insurance, according to a new survey of pre-retirees between the ages of 50 and 62 with a household income of at least $80,000.
The survey asked about specific automatic savings vehicles that help pre-retirees save in a disciplined, recurring way and revealed that nearly two in three (64%) report that this type of saving gives them more confidence heading into retirement than other forms of savings. But problematically, nearly half of pre-retirees (46 percent) say it is difficult to save additional funds outside of their automatic savings vehicles given all of the financial demands they are facing. Almost half (45%) express a desire for more automatic savings vehicles to add to their savings plan.
Pre-retirees also felt they got a later start to saving than they would have wanted. Respondents report having begun a serious savings plan at 34 years of age on
“This is a wake-up call to younger generations, Gen X, Gen Y and even Gen Z. Pre-retirees sit in an important vantage point—they are in a position to share what has worked well for them as they inch toward retirement,” said Chris Blunt, president of New York Life’s Investments Group. “These 50 and early
In addition, the survey revealed:
- Pre-retirees with children living at home find it even more difficult to save outside of their automatic savings vehicles with 58 percent reporting that it is difficult;
- Men more than women are confident in their automatic savings, with 68 percent of male pre-retirees and 59 percent of women reporting more confidence in their
auto pilotsavings than in other forms of savings;
- Pre-retirees with children living at home are more apt to want more automatic savings vehicles in their savings plan, with 58 percent wishing for more, compared to 45 percent of all pre-retirees; and
- There are very high levels of consumer confidence in a number of automatic savings vehicles. Among those who utilize these vehicles, large majorities have confidence that they will help them achieve financial goals:
- 93 percent are confident in their direct deposit to 401k/403b
- 81 percent are confident in their the college savings plan
- 79 percent are confident in their mortgage
- 78 percent are confident in their permanent life insurance
“These savings vehicles often fly under the
This survey was conducted online by Ipsos Public
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