Merrill Edge® Survey Finds Americans Feel Guilty About Not Investing Enough in 2014, Set Their Sights Higher for 2015

Lingering Student Debt Hinders Millennials’ Retirement Savings

Monday, October 27, 2014 9:00 am EDT

Feelings of guilt over not investing enough this year outpace common year-end regrets such as poor eating and drinking choices, not sharing enough time with loved ones or spending too much money on oneself. These are among the insights revealed by Bank of America’s latest Merrill Edge® Report released today.

Fewer than one in four (23 percent) feel “proud” of how they handled their money this year, and only half (50 percent) of respondents said they are “content” with the financial decisions they made in 2014. The new data suggests mass affluent Americans know they need to do more investing and saving for the future.

“Many mass affluent Americans feel they didn’t do enough this year to put themselves in a good place for the financial future they desire,” said Aron Levine, head of Preferred Banking and Merrill Edge at Bank of America Corporation. “Millennials, in particular, feel they are held back from investing and saving enough for retirement because of debts from unpaid student loans. The good news is investors of all ages are rethinking their priorities and plan to make retirement saving a top goal in 2015.”

The bi-annual survey conducted among 1,046 mass affluent Americans (individuals with $50,000-$250,000 in investable assets) found more than half (51 percent) of respondents did not save for retirement at all in 2014. However, a majority of this group plans to take action in 2015, with nearly six out of 10 (59 percent) making retirement savings and investing a goal for the upcoming year. This is a more popular goal than losing weight, which was cited by 42 percent of the people.

When asked about the role finances play in their day-to-day decisions, respondents revealed these daily choices merit more of their attention:

  • Long-term finances are taken into consideration by most respondents when conducting routine financial activities, including paying bills (73 percent) and receiving extra funds (66 percent). However, fewer than half (47 percent) make the same connection between daily purchases such as groceries and their long-term financial goals.
  • Most respondents do not believe other spending activities will impact their long-term financial goals. Just 33 percent believe spending on entertainment would have an impact, while fewer than four in 10 think eating at restaurants (37 percent) and paying for gas (38 percent) would make a difference on these goals.
  • More than eight out of 10 (82 percent) believe some of the best decisions they are making today are financial, specifically in the areas of avoiding debt (33 percent), saving for the future (27 percent) and budgeting (22 percent).
  • In contrast, many respondents admit they are making some of their worst decisions when it comes to their health (22 percent) and romantic relationships (21 percent).

Millennials prioritize investing and saving

In comparison to older generations, the Merrill Edge Report also found that Millennials are the most focused on their investments. One-third (33 percent) of Millennials report that among a number of other common tasks, they spend the most time each week on their investments. Just 20 percent of Gen Xers and 17 percent of Baby Boomers report the same. Instead, Gen Xers place budgeting (40 percent) on the top of this list of common activities, while grocery lists (40 percent) are most popular among Seniors.

The survey also indicates more than half of Millennials (52 percent) currently seek investment advice online, and more than four out of 10 (43 percent) have a financial advisor they consult.

“Earlier this year, our Spring 2014 Merrill Edge Report revealed Millennials felt confident about having enough money for retirement, and we continue to see a promising long-term financial focus from them,” Levine said. “With some uncertainty still surrounding the economy and the job market, the younger generation is taking matters into their own hands by making investing and saving a top priority.”

Millennials, however, are affected the most by debt, the survey found. A majority of Millennials (75 percent) surveyed have student debt, and nearly half (46 percent) report they are putting off retirement saving and investing until they have paid off outstanding student loans. The group does seem determined to break the debt cycle though, as a majority of Millennials were able to pay down their debt (51 percent) in 2014.

Definition of financial success yields differing opinions

While 82 percent of respondents agree some of the best decisions they are making today are financial, genders and generations differ greatly when attempting to define financial success.

When describing financial success, women are more apt than men (74 percent vs. 61 percent) to focus on being debt-free. Men, however, are more likely than women to believe that if they’re financially successful, it’s because they can live comfortably now (70 percent vs. 60 percent) or have attained a high income (19 percent vs. 10 percent).

Millennials are equally likely to cite living comfortably now (73 percent) and not having any debt (73 percent) as a mark of financial success. Only 46 percent of Millennials believe attaining a high income is a definition of financial success. With retirement closer on the horizon, Gen Xers (86 percent) and Baby Boomers (89 percent) were most likely to define financial success as having enough for the retirement they want.

For more in-depth information about the financial behaviors and priorities of mass affluent Americans, read the entire Fall 2014 Merrill Edge Report here.

Merrill Edge Survey Methodology
Braun Research, Inc. (an independent market research company) conducted a nationally-representative telephone survey on behalf of Merrill Edge. The survey was conducted from September 10 through September 18, 2014, and consisted of 1,046 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. An oversampling of 300 mass affluent was surveyed in San Francisco, Los Angeles, Orange County, Calif., Dallas, New Jersey and South Florida. Also, as part of this study, we interviewed a total of 502 Millennials (defined as 18-34 years old) in the national U.S. sample. The n=502 Millennials are comprised of n=201 completes that came from the main, national sample. The remaining n=301 were obtained from an oversample of additional Millennials to achieve the total n of 502. The margin of error is +/- 3.0 percent for the national sample; about +/- 5.7 percent for the oversample markets; and about +/-4.4 percent for the national Millennial group, with each reported at a 95 percent confidence level. Kelton (an independent global insights firm) consulted with Merrill Edge and Braun Research, Inc., on the study implementation.

Merrill Edge
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