Their woes might be good for the rest of the country.
There’s an old expression…
You’re working class if your name is on your shirt, middle class if your name is on your desk, and upper class if your name is on the building.
Since the millennium, financial experts have worried about the retirement savings of the working class. Over the past few years, it became clear that was also a middle-class problem. Now there’s evidence it’s creeping into the upper class — and that’s the best bad news I’ve heard lately.
Before I explain why, let’s look at the upper-class problem.
“Retirement looms large even for higher-net-worth Americans who recognize the importance of saving and investing,” says Kathie Andrade, a vice president at TIAA-CREF, a national financial services company.
Last month, TIAA-CREF polled “affluent investors” — those with at least $250,000 in investments — and asked them about their “most important investment goal.” Topping the list was having enough money to live comfortably in retirement, at 41 percent. Only 5 percent were so sure of their retirement nest egg that they listed “create a legacy for their heirs” as their main goal.
If the wealthy are concerned about retirement, it’s no surprise the rest of the country is downright worried. Professional services firm Deloitte conducted its own retirement poll and found 55 percent of working adults “still do not feel financially set for their senior years despite improved economic conditions.”
Even though a majority feel that way, researchers were happy because the results were much worse three years ago. In 2012, it was 72 percent.
What happens now
One other revealing stat in the Deloitte study was how little workers of any income trust financial professionals…
Fewer than one-third (29 percent) of consumers in the current survey felt that financial institutions in general were highly trustworthy, while only one-third of respondents felt that way about financial professionals overall.
That’s a wake-up call for banks and financial planners. They need to do more — and not just market themselves better. They need to help hard-working Americans of all incomes save savvier, and they need to explain complex investment vehicles in plain English.
“If the financial industry wants better results for clients, they should make retirement advice and planning a top priority,” says Sean Cunniff, a senior Deloitte manager.
Obviously, that industry is motivated to keep and recruit new customers, and if all classes are nervous about their retirement, this could be the kick in the pants the financial industry needs. We’ll see. America has some of the brightest financial minds in the world, and I’d like to see them contemplate how to help future retirees from outliving their money.