The majority of young investors say they have a financial plan, but most also acknowledge that they’re not saving enough for retirement, new research shows.
Nationwide Retirement Institute, a unit of Nationwide Mutual Insurance Co., unveils this finding in a survey of 2,033 American investors ages 18 and older. Conducted by Harris Poll on behalf of Nationwide, the study surveyed financial decision-makers who have investable assets of $50,000 or more.
Nearly two-thirds (64 percent) of millennial investors ages 18 to 35 say they have a financial plan. The Nationwide survey also reveals, however, that young investors believe they’re only saving half of the amount they should be putting away. In respect to saving for retirement needs, the proportion rises to 68 percent.
The report adds that just over a third (36 percent) of millennial investors only guess at how much they need to fund their retirement. And nearly one in four do not know if they have a 401(k) plan.
(See an infographic recapping key findings from the Nationwide survey on the next page.)
While 58 percent of millennials conduct their own financial research and make their own investment decisions, only half are confident they know how much to save for retirement. For those millennials without a financial plan, 28 percent say that creating a financial plan is “overwhelming” And 40 percent say “they haven’t gotten around to it yet.”
In addition, 56 percent of millennial investors think they would be more financially successful with professional financial advice, but only 39 percent actually use a financial advisor.
“The good news is that millennials acknowledge the value of a professional and want to save and invest more,” says Mike Spangler, president of Nationwide Funds. “The financial industry has a real opportunity to help millennials understand how to balance the demands of paying for today with investing for their future.”
The survey also includes information about how current retirees approach investing when compared to millennials. Like millennial investors, 56 percent of current retirees surveyed reported that professional financial advice would help them be more successful than going it alone.
Of the 62 percent of retirees who work with an advisor, 83 percent have spoken or met with the advisor at least once in the past year. This compares to 55 percent of millennials who have done so with their advisor.
The Nationwide study also finds that millennial investors are more likely to consult family (50 percent) and websites (49 percent) than a financial advisor (39 percent) for their financial planning needs. Retirees turn to a financial advisor (62 percent), traditional media (37 percent) and follow their gut feeling (36 percent).
Read the full report here.