Merrill Edge® Report Finds the Traditional Idea of Retirement Is Officially Extinct for Millennials, but Los Angeles and Orange County Residents Aren’t so Sure
While millennials across America now strive for a new milestone of financial freedom, Los Angeles and Orange County residents are on the fence about their long-term intentions. Half of Southland residents are saving to achieve financial freedom, the amount of money needed to live their desired lifestyle, and half are saving for retirement, the amount of money needed to leave the workforce. On a national level, 63 percent of millennials are saving for financial freedom, while Gen Xers and baby boomers in the United States are saving for retirement (55 percent).
These findings are according to the latest Merrill Edge Report, a biannual survey of 1,000 mass affluent Americans1 that oversampled 300 Los Angeles residents, including Orange County, between March 21 and April 5, 2017. The report reveals significant differences between how Los Angeles respondents approach their financial futures compared to younger generations in the United States.
“The retirement landscape is shifting as younger generations strive for living a desired lifestyle instead of leaving the workforce. Los Angeles and Orange County residents are conflicted as to what they’re saving for as half are saving for financial freedom and half for retirement,” said Joseph Santos, regional manager of Merrill Edge. “No matter the end goal, it’s important for L.A. residents to prioritize saving in the short term, as we are seeing that many are placing things like dining out ahead of their financial futures.”
The report found Los Angeles and Orange County are currently more likely to spend their money on travel (80 percent), their home (76 percent), dining out (68 percent) and fitness (51 percent) than invest in their financial future or retirement. Southland respondents placed a higher premium on dining out than any other region surveyed.
In line with national respondents who are saving less than 10 percent (42 percent) of their salary, forty-six percent of Los Angeles and Orange County are saving less than 10 percent of their salary, including 7 percent who don’t save at all. This savings gap may be the reason Los Angeles residents don’t feel prepared for life’s “what-if” scenarios:
Greater Los Angeles residents align with most Americans in thinking they could do a better job to prepare for life’s surprises. Nearly three in five Los Angeles residents believe individuals in the U.S. should be required to save for retirement, and 48 percent believe financial education should be required.
Innovations in technology have a significant influence on the future of saving, as many Los Angeles respondents and Americans alike increasingly embrace recent industry advancements to make investment decisions and receive guidance.
Forty-four percent of Southland residents say they make and manage their investments through an online or mobile portal. Overall, these respondents cite this ability to invest via mobile makes them feel knowledgeable (39 percent) and empowered (37 percent).
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.
Merrill Edge is a streamlined investment service that provides access to the investment insights of Merrill Lynch and the convenience of Bank of America banking. With Merrill Edge, clients can view their Merrill Edge investment and Bank of America bank accounts on one page online. They also have access to easy-to-use tools, actionable insights, one-on-one guidance and competitive pricing for online trades.
Bank of America is one of the world's leading 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 47 million consumer and small business relationships with approximately 4,600 retail financial centers, approximately 15,900 ATMs, and award-winning digital banking with approximately 35 million active users and more than 22 million mobile users. Bank of America is a global leader in wealth management, 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.
Neither Merrill Lynch nor any of its affiliates or financial advisors provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.
Banking products are provided by Bank of America, N.A., and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation.
Merrill Edge® is available through Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S), and consists of the Merrill Edge Advisory Center (investment guidance) and self-directed online investing.
MLPF&S is a registered broker-dealer, Member SIPC and wholly owned subsidiary of Bank of America Corporation.
Are Not FDIC Insured Are Not Bank Guaranteed May Lose Value
© 2017 Bank of America Corporation. All rights reserved.
Reporters May Contact:
Susan Atran, Bank of America