Workers expect their defined contribution plans to play a greater role in their retirement income than annuities.
MILWAUKEE, April 30, 2014 /PRNewswire/ -- Americans feel slightly better about their financial circumstances today than they did a year ago, yet their optimism is tempered by the need to close a gap in their long-term savings and the continuing effects of the slow-growth economy. Forty-two percent of adults age 25 and older expect their financial situation to improve this year, though one in five say they still have a lot of catching up to do.
These are the latest findings from Northwestern Mutual's 2014 Planning and Progress Study, an annual research project that explores Americans' attitudes and behaviors toward finances and planning.
"Tempered optimism is a reasonable sign of progress, especially since it comes at a time when Wall Street and Main Street are giving somewhat mixed signals," says Greg Oberland, Northwestern Mutual president. "On one hand, the stock market seems to set new records every day. On the other, we are challenged by high unemployment and a slow-growth economy."
According to this year's study, people age 25 and older feel they're moving – slowly – in the right financial direction:
Oberland adds, "It's good to see that people feel their financial footing is a bit steadier, while also recognizing there's still a long way to go."
While Americans believe they're moving in the right direction personally, the study finds that they do not feel the same about the country as a whole. For example:
Are Americans Prepared for Longevity?
The study also revealed some interesting findings when it comes to financial preparedness later in life.
Planning Beyond the Savings Account
Oberland stresses that being financially prepared requires more than just relying on one's savings. It means having the appropriate solutions in place to navigate your changing needs over the arc of your lifetime.
The 2014 Planning & Progress Study revealed that, while two-thirds (67%) of American adults 25+ have a savings account, the majority of people aren't planning beyond it. For example:
"The desire and discipline to save are critical, however, on their own are often not enough to achieve long-term financial security," notes Oberland. "People have to see beyond their basic bank accounts, and understand how to put their money to work – both to accumulate and protect their assets."
About the Research
The 2014 Planning and Progress Study explores the state of financial planning in America today, and provides unique insights into people's current attitudes and behaviors toward money, goal-setting and priorities.
This study was conducted by Harris Poll on behalf of Northwestern Mutual and included 2,092American adults aged 18 or older (of which, 1,915 are aged 25 or older) who participated in an online survey between January 21, 2014 and February 5, 2014. Results were weighted as needed for age by gender, education, race/ethnicity, region and household income. Propensity score weighting was also used to adjust for respondents' propensity to be online. No estimates of theoretical sampling error can be calculated; a full methodology is available.
About Northwestern Mutual
Northwestern Mutual has been helping families and businesses achieve financial security for nearly 160 years. Our financial representatives build relationships with clients through a distinctive planning approach that integrates risk management with wealth accumulation, preservation and distribution. With more than $217 billion in assets, $26 billion in revenues and more than $1.5 trillion worth of life insurance protection in force, Northwestern Mutual delivers financial security to more than 4.2 million people who rely on us for insurance and investment solutions, including life, disability and long-term care insurance; annuities; trust services; mutual funds; and investment advisory products and services.
Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company, Milwaukee, WI, and its subsidiaries. Northwestern Mutual and its subsidiaries offer a comprehensive approach to financial security solutions including: life insurance, long-term care insurance, disability income insurance, annuities, investment products, and advisory products and services. Subsidiaries include Northwestern Mutual Investment Services, LLC, broker-dealer, registered investment adviser, member FINRA and SIPC; the Northwestern Mutual Wealth Management Company, limited purpose federal savings bank; Northwestern Long Term Care Insurance Company; and Russell Investments.
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SOURCE Northwestern Mutual