Chicago Residents Envision Financial Stress in Retirement, Retirees Worry-Free

Merrill Edge® Survey Finds Area Retirees Prove Saving Is Key to Financially Calm Golden Years

Tuesday, June 9, 2015 9:00 am EDT

About two-thirds (66 percent) of Chicago respondents expect to be stressed about money in retirement based on how they are currently saving, according to a new survey released today by Bank of America and Merrill Edge. The latest Merrill Edge® Report reveals that while non-retirees are anticipating stress, the majority (53 percent) of retirees in the area are not stressed based upon how they saved.

Despite predicting stress, nearly six in 10 (59 percent) Chicago respondents believe they will have enough money in retirement due to how they are saving for it, while the vast majority (85 percent) of retired respondents say they will have enough money for the rest of retirement based on how they saved leading up to their retired years.

“Many Chicagoans are concerned about financial stability in retirement, however many current retirees feel they will have enough savings for the rest of their retirement based on how they saved,” said David Bader, regional executive at Merrill Edge. “The majority of retired respondents saved for retirement prior to their golden years, which goes to show that having a financial strategy pays off in the future.”

Pursuing an ideal retirement without financial stress

Part of a biannual nationwide survey, the study explores opinions of Chicago residents with investable assets of $50,000 to $250,000 and finds that despite stress over future retirement, area respondents are still prioritizing living comfortably today (67 percent), as opposed to saving more for the future (58 percent).

Nationally, the Merrill Edge Report finds most non-retired respondents agree that an ideal retirement is one that is not spent worrying about money (77 percent) and is overall stress-free (70 percent). Chicagoans who have yet to reach retirement are taking actions to get there like today’s retirees, but could do more to emulate strategies that retied Americans employed to ensure their retirement years were less worrisome:

  • Today, the most popular actions that non-retired Chicago residents are taking to live a stress-free retirement are funding a retirement account (58 percent) and paying off debt (56 percent). Contributing to a retirement account (68 percent) and paying off debt (66 percent) were also some of the most common measures that retirees took to reduce strain in retirement before reaching that stage.
  • However, more than four in 10 (45 percent) area retirees preemptively worked with a financial advisor to be stress-free when they did retire, and only 39 percent of non-retire area respondents are doing this with the same goal in mind.
  • Similarly, only 30 percent of Chicago respondents who have yet to reach retirement are investing in a non-retirement account to reduce stress; whereas, nearly one-third (32 percent) of area retirees proactively invested as much as they could outside of a retirement account.

Financial fears lead to positive financial actions

While many Chicagoans are taking clear steps to prepare for retirement, the survey found that many respondents would still be embarrassed if their friends or family saw the amount of their retirement savings (15 percent) or their checking account balance (15 percent).

Similarly, 14 percent of retirees and non-retirees alike feel they lag behind their peers financially whether in earnings, savings or overall stability. However, these shortfalls also appear to be a catalyst for better financial planning. Respondents have felt motivated to make positive financial decisions due to the successes and failures of their parents (28 percent) and overall financial stress (24 percent).

For more in-depth information about the financial behaviors and priorities of mass affluent Americans, read the entire Spring 2015 Merrill Edge Report or take our poll here. See the corresponding infographic here.

Merrill Edge Survey Methodology
Braun Research, Inc. conducted a nationally-representative telephone survey on behalf of Merrill Edge. The survey was conducted from March 12, 2015, through March 24, 2015, and consisted of 1,000 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 to $250,000 or those aged 18 to 34 who have investable assets of between $20,000 and under $50,000 with an annual income of at least $50,000; or aged 35-plus with investable assets between $50,000 to $250,000. We conducted an oversampling of 300 mass affluents in the following markets: San Francisco; Los Angeles; Orange County, California; Dallas; the State of New Jersey; South Florida; Chicago; and Phoenix. The markets of Chicago and Phoenix were newly-surveyed this wave. The margin of error is +/- 3.0 percent for the national sample; about +/- 5.7 percent for the oversample markets, all reported at a 95 percent confidence level.

Merrill Edge
Merrill Edge is a streamlined investment service that provides customers access to the investment insights of Merrill Lynch and the convenience of Bank of America banking to help simplify their financial life. With Merrill Edge, customers can see their Merrill Edge investment and Bank of America bank accounts on one page online, along with access to tools, research, support and competitive pricing for online trades. If customers prefer to receive professional advice and guidance to help simplify pursuing their investment goals, Merrill Edge Roadmap™ allows them to work one-on-one with a licensed Merrill Edge Financial Solutions Advisor™. Financial Solutions Advisors work with customers to design a personalized action plan with specific recommendations tailored to their investment needs.

Bank of America
Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 48 million consumer and small business relationships with approximately 4,800 retail financial centers and approximately 15,900 ATMs and award-winning online banking with 31 million active users and approximately 17 million mobile users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.

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Kristen Georgian, Bank of America, 617.434.0234