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Spring 2016 Merrill Edge Report

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1Research provided by BofA Merrill Lynch Global Research.

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Key Findings from the Spring 2016 Merrill Edge Report

On April 18, 2016, Bank of America released the spring 2016 Merrill Edge Report, a biannual study that offers an in-depth perspective at the financial concerns, priorities and behaviors of mass affluent. Findings include:


Millennials Reshaping Retirement Path

Millennials view retirement as a time full of possibilities

This year, survey data revealed millennials’ perspective on their later years and financial planning hints at a possible redefining of retirement. Nearly half (41 percent) of the generation surveyed expects to retire when they hit a certain financial milestone or savings goal, different from older generations that leave or plan to leave the workplace at a certain age or due to health concerns.

Fifty-three percent of millennials view retirement as the start of something exciting; compared to retirees, 21 percent of millennials view retirement as a time for new opportunities as opposed to a time for rest and relaxation:

  • 10 percent of millennials are likely to pursue a passion.
  • 7 percent plan to further their education.
  • 4 percent want to start or grow their own business.

In addition, millennials are aware of changes that can affect their retirement, with 47 percent believing the outcome of the 2016 presidential election will have a positive impact on their long-term financial goals, higher than any other generation.


Savings Shortcomings

Retirement takes the backseat as many focus on short-term priorities

Despite millennials’ focus on goal-oriented financial futures, many admit they could be more proactive in personal savings, on par with the general sentiment of Americans overall. Nearly half (48 percent) of Americans say they are most insecure about some aspect of their finances.

Twenty-one percent of Americans rank retirement savings as their top insecurity, ahead of their personal relationships (10 percent), judgment of others (6 percent) and career path (4 percent).

However, despite strong insecurities, Americans seem to be struggling to prioritize retirement savings. When survey participants were asked to grade themselves on retirement planning thus far, 38 percent awarded themselves a grade of “C” or lower and only 18 percent gave themselves a score of an “A.”


Retirement Realities

Retirees’ responses conflict with millennial expectations

These savings shortfalls may be indicative of the retirement today’s retirees are living. When asked what they have done in retirement that they didn’t expect, 30 percent of retiree’s stated they spent more money than anticipated, followed by 19 percent moving to a new location and 18 percent feeling a lack of purpose.

Furthermore, when comparing the priorities of current retirees and the millennial generation, the reality of retirement paints a different picture than expected. Twenty-nine percent of retirees rank maintaining their standard of living as a top priority, followed by spending time with loved ones at 27 percent and maintaining their health at 23 percent. To put this into perspective, 19 percent of non-retirees plan to make traveling the world a top priority, while only 5 percent of retirees have actually prioritized traveling.

Although non-retirees and millennials have big plans for retirement, continued savings challenges and unexpected economic variables may pose a threat.


Merrill Edge Report Methodology
Braun Research, Inc. conducted a nationally representative telephone survey on behalf of Merrill Edge. The survey was conducted from February 12 through March 1, 2016, and consisted of 1,003 mass affluent respondents throughout the U.S., defined as individuals with investable assets (value of all cash, savings, mutual funds, CDs, IRAs, stock, bonds and all other types of investments excluding primary home and other real estate investments). Respondents in the study were defined as aged 18 to 34 (millennials) with investable assets between $50,000 and $250,000 or those aged 18 to 34 who have investable assets between $20,000 and $50,000 with an annual income of at least $50,000; or aged 35-plus with investable assets between $50,000 and $250,000. We conducted an oversampling of 300 mass affluents in the following markets: San Francisco; Los Angeles; Orange County, California; Dallas; New Jersey; South Florida; Chicago; Atlanta; and Phoenix. The margin of error is +/- 3.0 percent for the national sample and about +/- 5.7 percent for the oversample markets, all reported at a 95 percent confidence level.

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News Releases and Additional Information

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Research Materials

 

Executive Biographies

  • Dean Athanasia, president of Preferred and Small Business Banking, Bank of America
  • Aron Levine, managing director and head of Preferred Banking and Investments, Bank of America
  • John Thiel, head of U.S. Wealth Management and the Private Banking and Investment Group, Merrill Lynch Global Wealth Management

 

For More Information

For more information about Merrill Edge and the Merrill Edge Report, please contact Kristen Georgian, Bank of America, 1.617.434.0234.