Chicagoans and older Americans across the country are saving for retirement, while younger Americans across the country are saving long-term for financial freedom. Sixty-three percent of millennials nationwide are looking to achieve the amount of money or savings needed to live their desired lifestyle, while Chicagoans (52 percent) and older Americans, including Gen Xers and baby boomers (55 percent), are saving to leave the workforce.
These findings are according to the latest Merrill Edge Report, a biannual survey of 1,000 mass affluent Americans1 that oversampled 300 Chicago residents between March 21 and April 5, 2017. The report reveals significant differences between how Chicagoans approach their financial futures compared to younger generations in the United States.
“We’re witnessing a drastic change on the national front, as younger generations strive for a new milestone of financial freedom. While we’re seeing a significant shift in Chicagoans starting to plan for this new concept, the majority of residents remain ‘traditionalists’ and aim to leave the workforce one day,” said Don McDonough, regional sales executive of Merrill Edge. “With the growing divide, it’s more important than ever Chicagoans implement and follow a long-term savings strategy with their end goal in mind.”
And it appears they could be doing better at savings. The report found Chicagoans are currently more likely to spend their money on travel (84 percent), their home (76 percent), dining out (67 percent) and fitness (53 percent) than invest in their financial future or retirement.
In line with national respondents, 43 percent of Chicago residents are saving less than 10 percent of their salary, including 9 percent who don’t save at all. This savings gap may be the reason why Chicago respondents don’t feel prepared for life’s “what-if” scenarios:
Chicago respondents think they could do a better job to prepare for life’s surprises. In line with that, 49 percent of Chicago residents believe individuals in the U.S. should be required to receive a financial education, and 59 percent believe they should be required to save for retirement.
Innovations in technology have a significant influence on the future of saving, as many Chicagoans and Americans alike are increasingly embracing recent industry advancements to make investment decisions and receive guidance.
Thirty-eight percent of Chicago residents say they make and manage their investments through an online or mobile portal. Overall, Chicago respondents cite this ability to invest via mobile makes them feel knowledgeable (43 percent), empowered (36 percent) and savvy (24 percent).
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.
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