June 30, 2015

Retirement Savings Worry Looms Large

 

More than a third of all investors say "living for today" impedes saving for the future

NEW YORK--(BUSINESS WIRE)-- E*TRADE Financial Corporation (NASDAQ:ETFC) today announced results from the most recent wave of StreetWise, E*TRADE's quarterly tracking study of experienced investors. Results show that investors worry more frequently about saving for retirement than they do about their personal relationship issues, potential job loss, or physical injury. Yet, at the same time, they admit that short-term expenses hinder their long-term savings efforts, not the least of which includes emotional spending.

According to the study, investors cite wanting to "live for today" as a major barrier to saving for retirement — behind only health care, and statistically tied for second with housing costs and day-to-day living expenses like food or utilities.

"Investors have the all-too-human tendency to prioritize today's expenses over future security," says Lena Haas, SVP, Retirement, Investing, and Savings at E*TRADE Financial. "The key to combatting this emotional decision-making is in how we contribute to our long-term plan. We must remove emotion from the equation — and we can do that through automation."

Ms. Haas offered the following tips for creating a more automated investing approach to saving for retirement:

  • Automate your 401(k) and get the match. Setting up contributions to automatically deduct from each paycheck will help instill discipline and erase emotional financial decision-making. Additionally, many employers offer 401(k) plans with a contribution match. Learn the facts about your employer's plan and determine if you can take advantage of a matching feature, as not doing so is akin to leaving money on the table.
  • Set up an AIP and employ dollar cost averaging. For those without a 401(k) option, or who also have a Roth or Traditional IRA, Automatic Investing Programs (AIPs) make investing routine. Dollar cost averaging allows investors to put even small sums of money to work by buying a fixed amount of a given security every week, month, quarter, or however often they decide to invest.
  • Put cash to work. Emotional decision-making can also cause investors to keep too much cash in their investing accounts. Asset allocation tools, like E*TRADE's Online Portfolio Advisor, can help investors with planning for retirement. For investors with dividend-paying securities, consider Dividend Reinvestment Programs (DRIPs), which offer a way to automatically reinvest any cash earned from dividends.

E*TRADE is a partner in helping investors balance today's needs with tomorrow's goals through pioneering digital tools and personalized, smart guidance, both online and from nearly 300 seasoned financial consultants on the phone or in-person at branches throughout the U.S. To learn more about how E*TRADE helps investors make retirement easier, visit etrade.com/retirement.

For useful insight from E*TRADE and third-party investment professionals, follow the company on Twitter, @ETRADE.

About E*TRADE Financial

E*TRADE Financial and its subsidiaries provide financial services including online brokerage and banking products and services to retail customers. Specific business segments include Trading and Investing and Balance Sheet Management. Securities products and services, including stocks, bonds, mutual funds, ETFs, education, and online tools are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Managed Account Solutions are offered through E*TRADE Capital Management, LLC, an investment adviser registered with the Securities and Exchange Commission. Bank products and services are offered by E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries and affiliates. More information is available at www.etrade.com. Dollar cost averaging does not assure a profit and does not protect against a loss in declining markets. ETFC-G

About ResearchNow

ResearchNow, a leading digital data collection provider, powers market research insights. They enable companies to listen to and interact with the world's consumers and business professionals through online panels, as well as mobile, digital, and social media technologies. Their team operates in over 20 offices globally and is recognized as the market research industry's leader in client satisfaction. They foster a socially responsible culture by empowering their employees to give back. To find out more or begin a conversation, visit www.researchnow.com.

About the Survey

This wave of the survey was conducted from March 31 to April 10 of 2015 among an online U.S. sample of 1,002 self-directed active investors who manage at least $10,000 in an online brokerage account. The survey has a margin of error of ±3.1 percent at the 95 percent confidence level. It was fielded and administered by ResearchNow. The panel is 65 percent male and 35 percent female with an even distribution across online brokerages, geographic regions, and age bands.

Referenced Data

       
How often, if at all, do you worry about each of the following? (%=Always/Frequently)      
Not having enough saved for retirement     30%
Loss of a loved one     30%
Not understanding how to invest smartly     22%
Personal relationship issues     20%
Loss of a job     18%
Physical injury     17%
       
     
When it comes to saving what you want for retirement, how much of a barrier is each of the following?

(%=Very/Somewhat significant)

   
Healthcare costs for your family   45%
Rent or mortgage   38%
Wanting to live for today   37%
Day-to-day living expenses like food or utilities   35%
Education costs for your children   32%
Childcare   20%
Paying down student loans   20%

Important Notices

E*TRADE Financial, E*TRADE and the E*TRADE logo are trademarks or registered trademarks of E*TRADE Financial Corporation.

© 2015 E*TRADE Financial Corporation. All rights reserved.

E*TRADE Financial Corporation and ResearchNow are separate companies that are not affiliated. E*TRADE Financial Corporation engages ResearchNow to program, field and tabulate the study.

E*TRADE Media Relations
Thayer Fox, 646-521-4418
thayer.fox@etrade.com
or
E*TRADE Investor Relations
Brett Goodman, 646-521-4406
brett.goodman@etrade.com

 

Source: E*TRADE Financial Corporation

 

 

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