2024 Retirement, FA Confidence Survey in Charts
Investors are telegraphing cautious optimism about their ability to save for retirement, according to a new study.
A survey of 2,521 workers and retirees conducted in January by the Employee Benefit Research Institute found that, while confidence in their savings is up slightly over last year, concerns about volatility and inflation have driven interest in guaranteed income products and emergency savings plans.
The survey’s sponsors include Ameriprise, Bank of America, Fidelity, JPMorgan, the Financial Industry Regulatory Authority and USAA.
Retirement ConfidenceThe percentage of workers who say they are somewhat or very confident that they will have enough money to live comfortably in retirement has held steady over the past 10 years but increased slightly this year after dropping nearly nine percentage points in last year’s survey.
The percentage of retirees who say they are very confident they’ll have enough money to live comfortably also ticked up slightly but remains below pre-pandemic levels.
And both retirees and workers largely agree that financial services companies “understand how to help with retirement and financial planning,” with workers slightly more confident. For both groups, the level of trust has risen since last year’s survey.
Annuity AffinitySocial Security remained the primary income source for retirees, followed by personal savings and pension plans.
A majority of workers expect guaranteed income investment products — such as annuities — to be a source of income in retirement. But just 28% of retirees said they are.
More than four out of every five workers expressed interest in annuities as part of their retirement savings.
Uptake is still in its early stages. Target date funds that incorporate annuities reached $50 billion in assets earlier this year. Still, they made up a sliver of the $3.5 trillion in target-date assets as of the end of 2023.
The growth was driven largely by respondents less than 45 years old, said Craig Copeland, director of wealth benefits research at EBRI.
“It does look like those people are looking for stability in what they have, so that they know they’re going to actually have an income,” he said. “People are really trying to figure out how to change the assets into income to give them some idea of what they could spend because having a paycheck or pseudo paycheck is a lot easier to manage than trying to manage assets.”
Information SourcesEducational and coaching services, such as optimizing the timing of Social Security claims and implementing an emergency savings plan, may also be areas of opportunity for advisors.
Less than half of workers said they’ve planned how to cover an emergency expense in retirement, and the ability to save for unexpected expenses was the top improvement workers said they’d like to see in their retirement savings plans.
And just one in five workers and one in four retirees said they understand Social Security claiming decisions very well.
Workers’ reliance on professional financial advice has increased steadily: from 27% in 2021 to 35% in 2024.
Meanwhile, the percentage of investors who say they rely on advice from family and friends has doubled since 2019 to 44%.
EBRI also asked for the first time this year about the use of AI tools such as ChatGPT for investment advice. Seven percent of respondents indicated they use AI-based advice tools.