San Francisco Residents Envision Financial Stress in Retirement, Retirees Worry-Free
Merrill Edge® Survey Finds Area Retirees Prove Saving Is Key to Financially Calm Golden Years
Nearly seven in 10 (69 percent) San Francisco residents expect to be financially stressed 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 San Francisco non-retirees are anticipating stress, the majority (62 percent) of local retirees in the area are not stressed about finances based on how they saved.
Despite predicting stress, more than half (52 percent) of non-retired San Francisco respondents believe they will have enough money in retirement due to how they are saving for it, while the vast majority of retired respondents (78 percent) report they will have enough money for the rest of retirement based upon how they saved for it before they retired.
Part of a biannual nationwide survey, the study explores the opinions of San Francisco residents with investable assets of $50,000 to $250,000 and finds that area respondents are slightly more likely to prioritize having enough money to live comfortably today (64 percent) over saving money for the future (59 percent).
“The San Francisco market is caught between concern for the future and wanting to enjoy their lives now,” said Linda Shelby, regional executive at Merrill Edge. “The good news is despite their stress surrounding their retirement years, they are taking proactive steps to pursue future financial success.”
Pursuing an ideal retirement without financial stress
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). San Francisco respondents who have yet to reach retirement are taking action to get there like today’s retirees, but could do more to emulate strategies that retired Americans employed to ensure that their golden years were less worrisome:
- Today, the most popular actions that non-retired San Francisco residents are taking to live a stress-free retirement are funding retirement accounts (60 percent), such as a 401(k) account or an IRA, and paying off debt (56 percent). Contributing to a retirement account (51 percent) and paying off debt (60 percent) were also some of the most common measures that retirees took to reduce strain in retirement before reaching that stage.
- However, nearly six in 10 (57 percent) of area retirees preemptively worked with a financial advisor to be stress-free when they did retire, and only 29 percent of non-retired area respondents are doing this with the same goal in mind.
- Similarly, only 37 percent of San Francisco respondents who have yet to reach retirement are investing in non-retirement accounts to reduce stress; whereas, more than four in 10 (43 percent) area retirees proactively invested as much as they could prior to retirement.
Financial fears lead to positive financial actions
According to the survey, while the majority of non-retired San Francisco residents are actively investing for retirement, nearly one-third (31 percent) would still be embarrassed if their close friends or family knew intimate details of their finances, including their retirement savings (14 percent), checking account balance (13 percent) and credit score (13 percent).
Along similar lines, 37 percent of national respondents feel that they lag behind their peers in terms of financial stability, saving for the future or current income. However, these shortfalls also appear to be a catalyst for better financial planning. Area retirees and non-retirees alike have felt motivated to make positive financial decisions by financial stress (20 percent) and by seeing the failures and successes of their parents (25 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.
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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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