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Fall 2016 Merrill Edge Report

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1Research provided by BofA Merrill Lynch Global Research.

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Key Findings from the Fall 2016 Merrill Edge Report

On December 2, 2016, Merrill Edge released the Fall 2016 Merrill Edge Report, a biannual study that offers an in-depth perspective at the financial concerns, priorities and behaviors of mass affluent Americans. Findings include:


The New Retirement: Not Retiring

Millennials may never see an end to their working days

This fall, Merrill Edge Report data revealed younger generations may never experience retirement as it’s defined today. The majority (83 percent) of millennials plan to work in retirement, whether for income, to keep busy or to pursue a passion, which is a complete inverse of the 83 percent of today’s retirees who are not currently working or have never during their golden years.

This shows an upheaval in how the largest generation in today’s workforce will plan and save for their later years. Exactly half of younger millennials (ages 18–24) believe they need to take on a side job to reach their retirement goals, compared to 25 percent of all respondents.


Growing Savings Insecurities

Americans struggle with challenges, demonstrate discomfort discussing savings

Millennials and Americans overall are unable to articulate how much money they will need in retirement. Many Americans feel uncertain or underestimate their “magic number” – the amount of money they think they need to live their desired retirement.

  • Fifty-six percent of respondents don’t anticipate needing more than $1 million in retirement.

  • Nineteen percent “don’t know”’ their magic number.

  • Nearly the same number of respondents (17 percent) believe they need to win the lottery to reach their financial goals in retirement.

When asked why they save for retirement, affording daily life (57 percent) and taking care of family (45 percent) are both at the top of the list. However, this does not mean Americans are comfortable disclosing their savings with their closest relationships.

Fifty-four percent of respondents only feel comfortable discussing their current retirement savings with their spouse or partner, followed by a financial advisor (39 percent), family (36 percent) or friends (22 percent).

Despite these growing insecurities, many still believe they are better at saving than their friends (43 percent), co-workers (28 percent) and spouse/partner (27 percent).


Taking the reins

Younger generations lead trend to DIY investments

Seventy percent of millennials describe their investment approach as “hands on” (compared to 60 percent of all respondents). Millennials are also most likely to describe their investment personality as “DIY,” with 32 percent of respondents making their own rules when it comes to investments (compared to 19 percent of all respondents).

This growing sense of self-reliance among millennials, however, seems to be increasing the desire for further financial guidance and validation from professionals. Compared to any other generation, millennials are most likely to hire a financial advisor in the next five years (31 percent) and are most open to receiving financial advice online (42 percent).


Merrill Edge Report Methodology

Braun Research, Inc. conducted a nationally representative telephone survey on behalf of Merrill Edge. The survey was conducted from September 24, 2016 through October 5, 2016, and consisted of 1,045 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 Mike Conner, Bank of America, 1.980.386.8359.