Everyone likes to daydream about an early retirement, with visions of sandy beaches, pristine golf courses and fully-realized hobbies dancing in their heads. But how many people actually use that head space to plan how to get there?
A number of Mintel reports have shown that Americans are woefully underprepared for retirement. The most recent numbers, from Mintel’s Consumers and the Economic Outlook-US 2014 report show that only 30% of all Americans have more than $100K saved in all of their savings/investment accounts (including retirement savings). In addition, less than one in four of those closest to retirement (ages 45-64) have that amount or more saved. According to Mintel’s Consumer Attitudes toward Retirement Planning-US 2013, less than 14% of respondents said they had conducted any of the retirement planning activities listed, such as talking to an advisor, using an online calculator to see how much they will need to retire, researching social security benefits or retirement strategies, or estate planning
Make It Real
The financial services industry has traditionally focused on advising people on how to invest their money. Of course, this assumes that people have money to invest. If the industry is going to be successful with attracting demographic groups such as Millennials and the emerging Mass Affluent (and even Baby Boomers), they need to go one step further and offer ways to help people find the money to invest. In addition, they can look at messaging that makes the necessity of saving money more “real” and immediate for their customers.
What It Means
There is tremendous potential in the personal financial management tools (PFM) that many financial firms are offering – but the problem is that usage numbers are not all that high. There are two primary reasons for this – the tools are not simple and they are not enjoyable to use. The industry may want to look at other industries and see what is working, but there are several examples within the industry that may provide inspiration on how to redesign these tools. For instance, Money Desktop is a PFM budgeting tool that offers a highly intuitive user interface. Even more enjoyable (and particularly appealing to Millennials) is 56 Sage Street offered by Barclays, a popular online game whose aim is to teach young people about responsible financial planning.
Susan is a Senior Financial Analyst at Mintel. Susan has been in market research and financial services for more than twenty years. As an industry expert, Susan has been quoted extensively in a number of publications, including American Banker, U.S. News and World Report, Money Management Executive, Cards & Payments, Euromoney, and others.
