Merrill Edge and Merrill Edge Report

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1 Research provided by BofA Merrill Lynch Global Research.

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Key findings from the spring 2019 Merrill Edge Report

On June 14, 2019, Bank of America released the spring 2019 Merrill Edge Report, a biannual study that offers an in-depth look at the financial concerns, priorities and behaviors of mass affluent Americans. Findings include:

 

Americans believe how they manage their money would make their parents proud

Respondents are finding their financial footing and striving to be more fiscally responsible

This spring, Merrill Edge Report data found 85 percent of Americans believe how they are managing their finances today would make their parents proud, including today’s youngest generations of Gen Zers (74 percent) and millennials (86 percent). This may be in part to savvier spending and savings habits.

In fact, 85 percent of respondents improved their financial lives in the past year, including raising their credit score (45 percent), paying off credit card debt (43 percent), saving enough money to live on for three months without an income (35 percent), and investing some of their savings in the market (29 percent). These positive steps seem to be leading to a higher level of confidence about their long-term financial future. Within their lifetime, respondents are confident they will be able to retire at their target date (80 percent), create a savings or trust fund for their children (80 percent) and pay off their student loan debt (77 percent).

Americans even admit they reward themselves when they meet a financial goal, compared to only 26 percent who take a punitive approach when they fall short. Today’s youngest generations are especially embracing this “treat yourself” mentality, with 71 percent of Gen Zers and 66 percent of millennials taking this approach, followed by Gen X (42 percent) and baby boomers (43 percent).

Perhaps these positive reinforcements are helping Americans reach their goals, or maybe it is the professional financial guidance they are seeking. More than half (55 percent) of respondents currently use in-person or online financial guidance, while 65 percent say they plan to in the future.

 

Mind on my money, money on my mind

Finances taking a toll on Americans’ personal health

Despite making financial strides and becoming more mindful of their spending, Americans say managing their money still causes them stress. In fact, the majority admit handling their finances is impacting their mental and physical health (59 percent and 56 percent, respectively). In both instances, women are more likely than men to feel the impact on their mental health (64 percent, compared to 52 percent of men) and physical health (60 percent, compared to 51 percent of men).

Forty-five percent of Americans also admit feeling envious or jealous of those who they perceive as better off financially than they are. Again, women are more likely than men to feel this way (52 percent, compared to 38 percent of men). And this seems to have more of an impact on today’s youngest generations seem than their generational counterparts, with millennials and Gen Zers (59 percent and 61 percent, respectively) green with envy, followed by 41 percent of Gen X and only 22 percent of baby boomers.

With money management a taxing reality for many, Americans would hypothetically give up all social media platforms forever (41 percent), cut carbs, sugar and/or alcohol (37 percent), lose access to their smartphone for a month (35 percent) and run into their ex every time they are out with their current partner (25 percent) if it meant they never had to manage their personal finances again.

 

Debtor nation

Americans put life milestones on the back burner to pay off debt

Americans are split on their view of the near future, with 51 percent worrying about their finances over the next five years. Their top concerns include the potential for an inadequate amount of savings (55 percent), political instability (53 percent), a looming recession (47 percent), and market volatility (45 percent).

Another source of concern is debt. Seventy-three percent of mass affluent Americans of all ages are carrying around debt, excluding mortgages. The types of debt respondents are dealing with the most include credit cards (43 percent), auto loans (36 percent), student loans (20 percent), and personal loans (15 percent). Forty-six percent of respondents with debt owe more than $20,000, while 18 percent owe $50,000 or more.

In order to pay off more debt, more than two-thirds of Americans are delaying or abstaining from certain activities and life milestones, including going on vacation (43 percent), buying a car (37 percent), buying a home (30 percent), moving to a more expensive city or neighborhood (27 percent), having children (19 percent), and getting married (15 percent).

 

You can’t take it with you

Americans want to receive an inheritance and leave money behind, but lack a formal estate plan

With one of the largest generational wealth transfers in history on the horizon, 92 percent of Americans agree they want to leave money and other assets behind, including to their children (59 percent), spouse/partner (54 percent), siblings (17 percent), and nonprofits/charities (17 percent). However, 64 percent of respondents do not have a formal estate plan in place, including 46 percent of seniors and 59 percent of baby boomers.

Thirty-nine percent of Americans also expect to inherit or already have inherited all or part of their family’s estates, including cash (68 percent), personal property (57 percent), real estate (53 percent), and securities (41 percent). And the majority say their financial stability and lifestyle would benefit significantly or only be made possible by an inheritance from their family.

Today’s parents agree it is important they leave a legacy for their children, but they are divided on the approach. Thirty-eight percent of parents are making sacrifices to their lifestyle to leave behind a more substantial estate, including cutting back on dining out and entertainment (31 percent), reducing their travel and vacations (26 percent), delaying retirement (18 percent), and taking on a second job or working longer hours (15 percent). One in three parents are even asking “why wait?” and would rather transfer wealth to their children now, instead of waiting until they are gone.

 

Merrill Edge Report Methodology

Concentrix (an independent market research company) conducted a nationally representative, panel-sample online survey on behalf of Merrill Edge April 17-May 9, 2019. The survey consisted of 1,000 mass affluent respondents throughout the U.S. Respondents in the study were defined as aged 18 to 23 (Gen Z) with investable assets between $50,000 and $250,000 or those aged 18 to 23 who have investable assets between $20,000 and $50,000 with an annual income of at least $50,000; or aged 24-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 such as a 401(k), 403(B), and Roth IRA, but excluding primary home and other real estate investments. We conducted an oversampling of 300 mass affluents in Atlanta. The margin of error is +/- 3.1 percent for the national sample and about +/- 5.6 percent for the oversample market, reported at a 95 percent confidence level.

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News Releases and Additional Information

 

Press Releases

 

Research Materials

 

Executive Biographies

  • Dean Athanasia, president of Consumer and Small Business, Bank of America
  • Aron Levine, head of Consumer Banking and Investments, Bank of America

 

For More Information

For more information about Merrill Edge and the Merrill Edge Report, please contact Susan Atran, Bank of America, 1.646.743.0791.