Merrill Edge survey shows saving now is more important than ever, especially with women.
The economic crunch today is making more people think about tomorrow. Under an uncertain market, mass affluent consumers, with about $50,000-$250,000 nationwide, are saving more and more to meet short-term goals. A recent survey by Merrill Edge shows high numbers of those among this group are in Los Angeles.
“It’s more important than ever for clients to stay in control of their personal finances,” said Joe Santos, Financial Solutions Advisor with Merrill Edge.”
Despite the changing economic market and unemployment, many people are taking steps to stay afloat. The numbers of those overcoming the economic crunch hasn’t changed since last year’s report, but they haven’t dropped either. Many find that their financial situation has stayed the same and with a few exceptions:
• A majority (60%) of the mass affluent segment in Los Angeles believe it will be harder to save and invest for the long-term five years from now compared to today, and only 12 percent believe that it will be equally as difficult to save and invest five years from now as it is today (57% and 27% nationally, respectively)
• As a result, one in four in Los Angeles reported that they have stepped up their savings and investing routine in the last year (21% nationally)
• In the last year, 46 percent of the local mass affluent segment eliminated unnecessary expenses and 45 percent paid bills on time to improve their financial situation (37% and 38% nationally, respectively)
• In the next six months, a majority of the local mass affluent segment plans to focus on tracking and managing their money/budgeting (74% in Los Angeles, 67% nationally) and paying down debt (53% in Los Angeles, 47% nationally)
Having a budget is the focus of many individuals in Los Angeles. Around 60 percent of Los Angeles residents stated that long term saving would be difficult in the next five years. Many are eliminating unnecessary expenses and focusing on paying bills, household expenses and debt.
Many are saving but finding it difficult with issues like retirement, college savings and other priorities According to the Merrill Edge report:
• Given the recent economic climate, 41 percent of the local mass affluent expect to retire later than they had planned a year ago, up from 36 percent in January 2011 (47% and 42% nationally, respectively)
• The number one regret among Los Angeles respondents is not contributing enough to their 401(k) or retirement savings (27%), followed by having too much credit card debt (20%) (17% and 13% nationally, respectively)
• Ensuring that retirement assets last throughout their lifetime (78%) and being able to afford the lifestyle they want in retirement (75%) continue to be top concerns for the mass affluent, who also ranked these concerns atop their lists in January 2011 (73% and 72% nationally, respectively)
The report also showed that many women are concerned about their retirement.
“Women between the ages of 21 and 64, they constitute more than 60 million salaried workers in the United States right now,” said Santos. “Only 45 percent of those working women are putting in their retirement programs.”
Santos had some key points on how people can begin securing their financial future.
“The first thing we need to do is think about building a plan,” said Santos. “We want to make sure that people are really thinking about a strategy…starting to save as soon as you can and save every year.”
Last year’s report found that less than half had a formalized plan. Having a plan in place is the one key components to becoming financially stable. Learning how to use assets and having funds in case of emergencies are some preventive measures.
Utilizing financial tools available is also a great way for people in gain more information on how to maintain their finances. “Seeking trusted and guided advice by embracing new financial management tools,” according to Santos is one way people are going to get through the economic crisis.
For more information on statistics and financial management, please visit www.merrilledge.com.