Retirement Planning: One In Four Americans Don't Understand It
November 2, 2023
Will I be able to retire? How much do I need to save? What if I outlive those savings? Questions like these are common across America's current working population. Whether Gen X, Millennial or Gen Z worker populations, they each have hopes for a financially secure retirement, despite current economic uncertainty.
When it comes to retirement, research shows 70% of Americans plan to but are unsure they will really be able to, according to a recent Prudential survey. Having enough savings is a primary concern for almost half (40%) of Americans who are not confident they can retire. Concerns such as this may cause people to continue to work as they age - be it full time in their career or part time in a less demanding position.
Financial Knowledge Needed
This lack of confidence is coupled with a lack of financial knowledge. Just over 1 in 4 respondents (26%) said they do not have a strong understanding of what to do when it comes to retirement planning, and over half (59%) do not have a 401K account, one of the primary savings vehicles for retirement. Of those who do, 21% are unsure of how much money is currently in their account.
Captured in the survey, which polled 2,000 working adults across generations this spring, was a strong desire to retire and openness to receiving professional advice, yet a general uncertainty about how to begin. Fortunately, online tools are becoming more widely available, and some provide important insights that can bridge the retirement planning gap.
Online Retirement Insights
If you feel anxious about retirement and are confused about where to start, you are not alone. The survey found that among those who expressed confusion about retirement planning or are worried about being behind, most (65%) said they are open and willing to use digital tools. Because of their convenience, digital tools may be a smart option for people looking to take the first step in their retirement planning journey, but they aren't one size fits all.
One free online option is Prudential Stages for Retirement, a platform that offers a personalized digital experience with access to a team of financial advisors. By answering a few questions, the platform provides customers with a "Retirement Confidence" score and shows them the ways in which they are strong in their retirement preparedness as well as where they may need to adjust to get closer to their goal. Users can also access a retirement calculator to see just how much they need to save to achieve their individual vision for retirement.
A human touch in retirement planning
Even as online tools help bridge the retirement confidence gap, the survey shows that most people still want access to a financial advisor - even if they aren't physically in the room with them. A whopping 94% of all respondents say they are interested in receiving advice from a financial expert in some manner.
On Prudential Stages for Retirement, people of all age ranges, levels of wealth and retirement preparedness have one-click access to an advisor, virtually or in-person, if desired. There is no minimum savings required to access an advisor, so everyone can ask questions to help them gain more confidence in their retirement planning choices.
While most working people across generations have retirement as a goal, many don't know what to do to plan appropriately. Online retirement planning tools like those from Prudential can be an effective first step in gaining knowledge and boosting confidence that retirement dreams will become reality.