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Retirement Planning - US - May 2015

OVERVIEW
What you need to know
EXECUTIVE SUMMARY
The issues
People are not saving enough for retirement
Figure 1: Amount in retirement savings, by household income, January 2015
Figure 2: Amount in retirement savings, by generation, January 2015
Women have saved less than men
Figure 3: Amount in retirement account, by gender and age, January 2015
Lack of retirement planning education
Figure 4: Concerns about retirement saving, January 2015
The opportunities
Increasing number of single people
Figure 5: Ownership of retirement account, by marital status, January 2015
Advisers can step in
Figure 6: Steps taken toward retirement planning, by generation, January 2015
What it means
THE MARKET – WHAT YOU NEED TO KNOW
Retirement assets are at a record high
IRAs are the largest segment of the market
The number of people with a retirement plan is growing
Workers and retirees are more confident
MARKET SIZE
Retirement plan assets reach $24.7 trillion
Figure 7: Total US retirement plan assets, 2007-14
MARKET BREAKDOWN
IRAs comprise largest segment
Figure 8: US retirement plan assets, by segment, 2012-Q4 2014
IRA assets
Figure 9: IRA assets, selected years 1995-2013
401(k)s are growing in importance
Figure 10: Defined Contribution Plan Assets, by type of plan, selected years, 1995-2013
MARKET PERSPECTIVE
401(k) balances are up
Worker confidence is inching back
Figure 11: Worker confidence in having enough money to have a comfortable retirement, selected years
Retirees are also more confident
Figure 12: Retiree confidence in having enough money to have a comfortable retirement, selected years
MARKET FACTORS
Life expectancy
Figure 13: US life expectancy, for infants born in 1980-2012
Consumer savings
Figure 14: US personal saving rate, February 2005-February 2015
Unemployment rate
Figure 15: US unemployment rate, January 2012-March 2015
Access to employer-sponsored plan(s)
Figure 16: Percentage of US workers who have access to and participate in an employment-based retirement plan, 1987-2013
KEY PLAYERS – WHAT YOU NEED TO KNOW
Fidelity is the leader
More employee education is needed
Automatic enrollment and escalation aid tremendously
The government is getting involved
WHAT’S WORKING?
Fidelity is a leader in workplace education
Figure 17: Fidelity workplace education ads, 2015
Employers are increasing their assistance
Figure 18: Principal direct mail ad, 2015
Automatic enrollment/automatic escalation
WHO’S STRUGGLING?
More retirement planning education is needed
Figure 19: Concerns about retirement savings, by gender, generation, January 2015
WHAT’S NEXT?
myRAs
New regulations may come
THE CONSUMER – WHAT YOU NEED TO KNOW
Most people have a retirement account, but some segments are behind
Women lag men in retirement preparedness
Education and engagement are key
RETIREMENT PLAN OWNERSHIP
Most consumers have some type of retirement plan
Figure 20: Retirement plan ownership, any retirement plan, January 2015
Only half of single people have a plan
Figure 21: Retirement plan ownership, any retirement plan, by marital status, January 2015
Plan participation is low among Hispanics and Blacks
Figure 22: Retirement plan ownership, any retirement plan, by race and Hispanic origin, January 2015
HOW MUCH DO THEY HAVE?
How much they have
Figure 23: Amount in retirement savings, January 2015
Women are behind
Figure 24: Amount in retirement account, by gender, January 2015
Geographical region matters
Figure 25: Amount in retirement account, by region, January 2015
RETIREMENT PLANNING STEPS TAKEN
Retirement planning steps already taken
Figure 26: Steps taken toward retirement planning, January 2015
Men are more likely to do own research
Figure 27: Steps taken toward retirement planning, by gender, January 2015
Consumers look for adviser at $250K
Figure 28: Steps taken toward retirement planning, by amount in retirement account, January 2015
WHY NO ADVISER
Young women are not focused on retirement
Figure 29: Reason for not using a financial adviser, by gender and age, January 2015
Household income helps determine timing for advice
Figure 30: Reasons for not using a financial adviser, by household income, January 2015
Figure 31: Wells Fargo retirement advice direct mail ad, 2015
REASONS FOR NOT STARTING TO PLAN
Figure 32: Reasons for not starting to plan, January 2015
ATTITUDES TOWARD RETIREMENT
Few are confident, yet few are prepared
Figure 33: Attitude toward saving for retirement, January 2015
Millennial men are taking steps; Millennial women are not
Figure 34: Attitude toward saving for retirement, by gender and age, January 2015
RETIREMENT SAVING AND INVESTING BEHAVIOR
Figure 35: Retirement saving and investing behavior, January 2015
Few actively manage their retirement accounts
Figure 36: Retirement saving and investing behavior, by household income, January 2015
Consumers with large retirement accounts behave differently
Figure 37: Retirement saving and investing behavior, by amount in household’s retirement account(s), January 2015
RETIREMENT SAVING CONCERNS
Most don’t understand their plan
Figure 38: Top five concerns about retirement saving, by level of agreement, January 2015
Many young people would welcome help
Figure 39: Concerns about retirement savings, by generation, any agree, January 2015
CHAID ANALYSIS
Opportunities for advisers
Hispanic Millennials
Figure 40: Concerns about retirement saving – CHAID – Tree output, January 2015
Non-Hispanic Male Millennials
Figure 41: Concerns about retirement saving – CHAID – Tree output, January 2015
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Consumer survey data
Abbreviations and terms
Abbreviations
Terms
APPENDIX – CHAID ANALYSIS METHODOLOGY
Figure 42: Concerns about retirement saving – CHAID – Table output January 2015

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