Merrill Edge® Report Finds Retirement Is Becoming an Opportunity to
Pursue Passions, but How to Get There Varies Across Generations
NEW YORK–(BUSINESS WIRE)–Millennials’ perspective on their later years and how to get there hints
at a possible redefining of retirement, according to the latest Merrill
Edge® Report. Nearly half (41 percent) of the generation
surveyed expects to retire when they hit a certain financial milestone
or savings goal, whereas their older counterparts are focused on leaving
the workforce when they hit a certain age or can no longer work due to
The survey of more than 1,000 mass affluent Americans reveals that the
largest generation in today’s workforce has a different view on
retirement, alluding to a potential shift of the life milestone in the
years to come. For millennials, retirement is more than a time for rest
and relaxation – it’s a time full of possibilities.
The majority (53 percent) of millennials view retirement as the start of
something exciting. In comparison to their elders, 21 percent of
millennials are more likely to make pursuing a passion (10 percent),
furthering their education (7 percent) or starting/growing their own
business (4 percent) their priorities in retirement.
Also looking toward the future, 47 percent of millennials believe the
outcome of the 2016 presidential election will have a positive impact on
their long-term financial goals, higher than any other generation.
“It’s refreshing to see the mindset around retirement evolve,
particularly a strong optimism and a goal-oriented approach from younger
generations,” said Aron Levine, head of Merrill Edge at Bank of America.
“This focus is a great start, but one of the keys to a successful
retirement is to ensure savings are prioritized early and often. Year
over year, we continue to see today’s non-retirees struggle with the
impact short-term spending has on their long-term financial future.”
While millennials are taking a goal-oriented approach toward their
retirement, they align with Americans overall in thinking they could be
more proactive. Nearly half (48 percent) of Americans say they are most
insecure about some aspect of their finances (financial future,
retirement savings or income), with retirement savings (21 percent)
being one of their top insecurities, ahead of their personal
relationships (10 percent), judgment of others (6 percent) and career
path (4 percent).
Americans also cite that daily expenses in retirement will dominate
their financial future (28 percent), more so than managing health care
expenses (17 percent) and housing expenses (17 percent).
And, despite these strong sentiments, they still don’t seem to
prioritize retirement savings. When asked how proactive they were about
planning for retirement, nearly two in five (38 percent) award
themselves a grade of “C” or lower and only 18 percent give themselves
“It has become increasingly apparent that retirement planning is not
only evolving, but also has become a moving target that Americans must
continuously revisit to pursue their goals and priorities,” said Ken
Dychtwald, Ph.D., founder and CEO of Age Wave. “As we see in the latest
Merrill Edge Report, retirement planning requires a new mentality – ‘set
it and forget it’ is a thing of the past. As millennials are envisioning
living very long lives, this study reveals the new priorities they have
for work, leisure, success and money as they are coming to realize that
everything they do today, financially speaking, can impact the lives
they’re hoping to live in retirement.”
These savings shortfalls may be indicative of the retirement today’s
retirees are living. When asked what they have done in retirement that
they didn’t expect to, retirees’ top response was “spent more money than
anticipated” (30 percent), followed by “moving to a new location” (19
percent) and “feeling a lack of purpose” (18 percent).
Top priorities of retirees also seem to differ from those of
non-retirees. The retirees’ top priorities include maintaining their
standard of living (29 percent), followed by spending time with loved
ones (27 percent) and maintaining their health (23 percent). Despite
that nearly one in five non-retirees hope to make traveling the world
their top retirement priority, only 5 percent of retirees have
“Today’s retirees tell us they are experiencing a very different
retirement than non-retirees are envisioning,” said Levine. “With
continuing savings challenges and potential economic uncertainties
ahead, non-retirees should have a plan in place and regularly revisit it
to make sure it still aligns with what’s most important to them for
their retirement years.”
For more in-depth information about the financial behaviors and
priorities of mass affluent Americans, read the entire Spring 2016
Merrill Edge Report here.
A complementing infographic is available here,
and a video is available here.
Merrill Edge Survey Methodology
Braun Research, Inc. conducted a
nationally representative telephone survey on behalf of Merrill Edge.
The survey was conducted from February 12 through March 1, 2016, and
consisted of 1,003 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 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. We conducted an oversampling of 300 mass
affluents in the following markets: San Francisco; Los Angeles; Orange
County, California; Dallas; New Jersey; South Florida; Chicago; Atlanta;
and Phoenix. The margin of error is +/- 3.0 percent for the national
sample and about +/- 5.7 percent for the oversample markets, all
reported at a 95 percent confidence level.
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