Survey results recently released by Wells Fargo show that:
- 48 percent of middle-class Americans don’t think they’ll be able to save enough for a “comfortable retirement”;
- 34 percent say they’ll be at the daily grind until they’re 80 or older because they won’t have cash to retire;
- and 37 percent say they’ll punch a clock until they’re “too sick” or they fall over dead — just because they need the money.
Double ouch. These bleak figures are from the annual Wells Fargo Middle Class Retirement study, a telephone survey of 1,000 middle-class Americans ages 25 and 75 conducted from July 24 to Aug. 27.
If the above results aren’t grim enough, the survey shows that only 24 percent are confident in the stock market as a place to invest for retirement, while 45 percent say “the stock market doesn’t benefit people like me.”
“There is a striking amount of fear about the stock market among all investors,” said Laurie Nordquist, head of Wells Fargo Institutional Retirement and Trust, in a news release. “The middle class just isn’t making the link between being invested and the potential growth of their savings, but on top of this fear is apathy — there is no interest in learning more about investing. Fear and apathy are a bad combination, whereas knowledge about saving and investing is empowering. We’ve got to move people to this mindset.”
We’d like to underline and boldface fear and apathy.
Only 13 percent — 13 percent?! — of those surveyed call saving for retirement a priority. Excuse us if we don’t share their confidence that stellar career opportunities await us as we sail into and through our 80s. And we’re not so sure that Uncle Sam will string up a secure hammock for us to lounge in during our declining years.
What then is the solution? Guess we’re back to fear and apathy — or moving to that mindset mentioned by Nordquist and getting smarter about managing our money. Easy to preach, sometimes not so easy to do.
In an interview with David Laibson, an economics professor at Harvard University, Bloomberg addresses why it’s tough to get people to actually change their financial behavior in “How Our Brains Betray Us.”
“You should get the financial education you need when you need it. If you enroll in a 401(k) plan today, you should take the 45-minute educational seminar on it during the enrollment process. …,” Laibson says in the article.
“The human memory is so fallible. If I tell you something and expect you to remember it five years from now, that’s a big ask. So I would focus on teaching skills that translate immediately to practical application,” he says about financial education.
Wells Fargo defines the prime retirement savings years as ages 40 to 59. By Laibson’s logic, those years and the run-up to them — the mid-to-late 30s — are about when people should start learning how to bankroll their futures.
If you’re among the 45 percent who think you can’t take your dollars and brew more, many more perky little dollars in the stock market, maybe it’s time to wake up and smell the profits.
But learning comes easier one small step at a time, so below are two free webinars to get anyone new to investing started. BetterInvesting, by the way, is a nonprofit education association that’s been teaching folks how to invest their money since Harry S. Truman was president of these United States.
- “Why Invest in Stocks” http://www.betterinvesting.org/NR/rdonlyres/E7C19A1B-7100-41F6-B9A8-4372362F320D/0/20130124Why.asx
- “Understanding the Jargon” http://www.betterinvesting.org/NR/rdonlyres/D0B668C9-FD99-4282-9872-0EE358CC16A8/0/20130131Jargon.asx
BetterInvesting is a national nonprofit organization that has been empowering individual investors since 1951. Founded in Detroit, the association (formerly known as National Association of Investors Corporation) was born out of the conviction that anyone can become a successful long-term investor by following commonsense investing practices. BetterInvesting has helped more than 5 million people become better, more informed investors by providing webinars, in-person events, easy-to-use online tools for analyzing stocks and mutual funds, a monthly magazine and a community of volunteers and like-minded investors. For more information about BetterInvesting, visit its website at http://www.betterinvesting.org/investing/landing/openhouse/blog/index.html or call toll free (877) 275-6242.