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Saving for Retirement in Phoenix? Think Again

Merrill Edge® Report Finds the Traditional Idea of Retirement Is Officially Extinct for Phoenix and Millennials, With Many Saving for Financial Freedom Instead

Wednesday, May 31, 2017 9:00 am EDT

Dateline:

Phoenix
"We’re seeing a correlation between how Phoenix residents and millennials across the country are saving for the future, which is drastically different from older Americans"

Phoenix residents are mirroring millennials across the country as they start to plan long-term for financial freedom instead of retirement. Fifty-seven percent of Phoenix residents and 63 percent of millennials in the United States are looking to achieve the amount of money or savings needed to live their desired lifestyle, while Gen Xers and baby boomers in the United States (55 percent) are saving to leave the workforce.

These findings are according to the latest Merrill Edge Report, a biannual survey of 1,000 mass affluent Americans1 that oversampled 300 Phoenix residents between March 21 and April 5, 2017. The report reveals significant differences between how Phoenix residents approach their financial futures compared to younger generations across the country. 

“We’re seeing a correlation between how Phoenix residents and millennials across the country are saving for the future, which is drastically different from older Americans,” said Christine Baim, regional executive at Merrill Edge. “Phoenix residents and millennial respondents are saving to achieve a desired lifestyle, while older respondents are saving to leave the work force. With this new mentality, people in Phoenix should clearly define their specific financial goals and establish a strategy to pursue them.”

However, despite saving long-term for financial freedom, it appears Phoenix residents could improve their everyday saving habits. The report found Phoenix respondents are the most likely, compared to any other region, to spend their money on travel (84 percent), their home (78 percent), dining out (62 percent) and their pets (42 percent) than invest in their financial future or retirement.

Preparing for life’s “what ifs”

In line with national respondents (42 percent) who are saving less than 10 percent of their salary, thirty-nine percent of Phoenix residents are saving less than 10 percent of their salary, including 5 percent who don’t save at all. This savings gap may be the reason why Phoenix respondents don’t feel prepared for life’s “what-if” scenarios: 

  • Seventy-two percent say they are not very confident they could achieve their financial goals if they had children.
  • Two-thirds are not very confident they could achieve their financial goals if they were to get divorced.
  • Forty-five percent are not very confident they could achieve their goals if they outlived their significant other. 


Phoenix respondents think they could do a better job to prepare for life’s surprises. Fifty-seven percent of Phoenix residents believe Americans should be required to save for retirement, and 46 percent believe individuals in the U.S. should be required to receive a financial education.

The future of financial advice

Innovations in technology have a significant influence on the future of saving, as many Phoenix residents and Americans alike increasingly embrace recent industry advancements to make investment decisions and receive guidance.

Forty-two percent of Phoenix respondents say they make and manage their investments through an online or mobile portal. Phoenix-area residents cite this ability to invest via mobile makes them feel knowledgeable (50 percent) and empowered (42 percent).

For more in-depth information about the financial behaviors and priorities of mass affluent Phoenix residents and Americans, read the entire Spring 2017 Merrill Edge Report here. A complementing infographic is available here.


1 Merrill Edge Survey Methodology
Convergys (an independent market research company) conducted a nationally representative, panel sample online survey on behalf of Merrill Edge March 21-April 5, 2017. The survey consisted of 1,023 mass affluent respondents throughout the U.S. 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. For this purpose, investable assets consist of the value of all cash, savings, mutual funds, CDs, IRAs, stocks, bonds and all other types of investments excluding primary home and other real estate investments. We conducted an oversampling of 300 mass affluents in the following markets: Los Angeles, Dallas, South Florida, Chicago, Atlanta, and Phoenix. The margin of error is +/- 3.1 percent for the national sample and about +/- 5.6 percent for the oversample markets, all reported at a 95 percent confidence level.

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