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Retirement Savings a Key Concern for Americans
This entry was posted on 1/23/2008 3:56 PM and is filed under wealth marketing,Deposits.
NEW YORK, January 22, 2008 /PRNewswire/ — Having enough money to retire and
pay for major life needs — healthcare and education — are top
concerns of Americans facing financial pressures, according to CPA
financial planners surveyed by the American Institute of Certified
Public Accountants.
In responding to an open-ended question, nine out of 10 CPAs
surveyed said their individual clients were concerned about retirement.
Costs associated with health care and education were ranked by
respondents as the second (59 percent) and third (47 percent) financial
concerns of clients.
"Many Baby Boomers are discovering their retirement kitty is not as
big as it needs to be to fund a comfortable retirement and that they
are going to have to work longer than they had intended," said James
Metzler, AICPA vice president.
The results of the poll were released today at the AICPA's 2008
Advanced Personal Financial Planning Technical Conference in Las Vegas.
Respondents included CPAs who hold the Personal Financial Specialist
(PFS) credential, which the AICPA offers exclusively to CPAs who are
committed to financial planning as a practice discipline and have
demonstrated expertise in a number of areas of financial planning.
For Some, Life Decisions on Hold
Nearly a third of the respondents (32 percent) reported that clients
who are approaching retirement age are postponing leaving the workforce
for financial reasons.
As many as one-third of CPAs with clients between the ages of 25-34
are seeing individuals foregoing buying a home, having children and
even saving for retirement.
More Credit Card Debt
One third of the CPA planners said their clients were carrying more
credit card debt than they did five years ago, with excessive
discretionary spending pinpointed as the primary culprit. The median
level of increased credit card debt is $8,333.
"With so many people in debt because of unnecessary spending,
Americans of all ages need education and guidance about how to improve
their financial well-being," said Carl George, chair of the AICPA's
National CPA Financial Literacy Commission.
In 2004, the AICPA launched the 360 Degrees of Financial Literacy
effort, which has a dedicated consumer website,
www.360financialliteracy.org, containing hundreds of tools and
resources to help Americans improve their financial understanding. A
related campaign, Feed the Pig (www.FeedthePig.org), is designed to
help Americans aged 25-34 save for long- term financial security.
Methodology
The survey was conducted in December via a questionnaire emailed to
members of the AICPA Financial Planning Membership Section. Of the 427
respondents, 44 percent manage more than $10 million in assets; 10
percent manage $5 million to $10 million in assets; 21 percent have $1
million to $5 million in assets under management. Eight percent of
respondents are managing between $500,000 and $1 million, and 17
percent have less than $500,000 in assets under management. The margin
of error was plus-or-minus 4.5 percentage points.
Personal Financial Planning Client Needs Survey Results
Survey conducted from December 5-23, 2007
Question 1) On average, what are your clients top three personal finance concerns?
Retirement - 91%
Healthcare - 59%
Education - 47%
Aged Parents - 30%
Emergency Savings - 12%
Affording a Home - 11%
Estate Planning - 9%
Energy Costs - 8%
Credit Card Debt - 8%
Investments - 7%
Taxes - 3%
Other - 3%
Marriage - 2%
Having Children - 1%
2) Has the sub-prime mortgage issue affected your clients?
Yes - 27%
No - 64%
Don't Know - 9%
3) If "yes" to question 2: How has the sub-prime mortgage issue affected your clients?
Rethinking Buying a Home - 55%
Difficulty Obtaining Credit - 35%
Investments - 29%
Facing Foreclosure - 20%
Lost Jobs / Business Slowdown - 10%
Other - 3%
Little or no Impact - 2%
4) What is your personal view of the effects of the sub-prime mortgage issue?
Worst Coming - 48%
Worst Over - 30%
Other - 13%
No Opinion - 10%
5) Are your clients carrying more credit card debt than they did five years ago?
No - 50%
Yes - 30%
Unknown - 21%
6) If "yes" to question 5: What are the primary reasons your clients are carrying more credit card debt than they did five years ago? (check all that apply)
Excessive Discretionary Spending - 81%
Basic Living Expenses - 40%
Healthcare Emergency - 14%
Job Loss - 12%
Other - 7%
7) If "yes" to question 5: On average, how much more debt are they carrying?
$10,000 or more - 35%
$5,000 - to under $10,000 - 28%
$2,500 - to under $5,000 - 19%
Under $2,500 - 2%
Unknown - 17%
8) How are your clients with children in college paying the cost of education? (check all that apply)
Clients Paying Directly - 83%
Children Applying for Financial Aid - 64%
Client's Tapping Their Investments - 64%
Children Obtaining Financial Aid - 56%
Client's Obtaining Private Loans - 47%
Children Working During College - 45%
Children Contributing to Cost - 41%
Other - 6%
No Clients Have Children - 3%
9) What will be the average post-graduation debt burden for those children who have taken out student loans to pay for their education?
$100,000 or more - 5%
$50,000 - to under $100,000 - 19%
$20,000 - to under $50,000 - 37%
$10,000 - to under $20,000 - 12%
Under $10,000 - 6%
Unknown - 21%
10) Are your younger clients (age 25 to 34) postponing any of the following activities because of financial considerations? (check all that apply)
Home Purchase - 35%
Not Postponing Anything - 28%
Retirement - 24%
Having Children - 24%
No Clients in this Age Group - 17%
Marriage - 11%
Higher Education - 5%
Medical Procedure - 3%
Other - 2%
11) On average are your clients who are approaching retirement age:
On-track - 61%
Postponing for Financial Reasons - 32%
Other - 7%
12) What is your personal outlook for the U.S. economy over the next 12 months?
Very Optimistic - 1%
Optimistic - 30%
Neutral - 37%
Pessimistic - 29%
Very Pessimistic - 3%
13) Do you believe we are headed for a recession?
No - 52%
Yes - 37%
Unknown - 11%
14) What is the average amount of assets you currently have under management?
$10 Million or more - 44%
$5 Million - to under $10 million - 10%
$1 Million - to under $5 Million - 21%
$500,000 - to under $1 Million - 8%
Under $500,000 - 17%
Source: The American Institute of Certified Public Accountants
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