At a time when economic anxiety is increasing, 78% of Americans in a new survey who said they had a retirement savings plan reported an overall sense of well-being, compared with 52% without one, according to BlackRock.
Sixty-nine percent of respondents said financial health had a significant influence on their well-being — on par with physical and mental health and relationships.
However, only 56% had started to save for retirement, and just 45% felt confident they would achieve what they considered their ideal retirement.
Why? Many said they were too worried about their current financial situation to think about the future. Fifty-six percent cited high cost of living, 49% health care costs and 34% rising prices as the biggest threats to their current financial health.
Equally worrying, BlackRock said, was that only 44% of U.S. respondents reported having any market-based investment holdings at all.
It said there was a high correlation — a “virtuous circle” — between planning for the future and a sense of overall contentment. Those with a higher sense of personal well-being were also four times likelier to feel confident about their retirement income.
“For too many people, investing and retirement planning are all about an intangible future,” BlackRock’s president, Robert Kapito, said in a statement. “Thus, the incentive to start saving today just hasn’t been strong enough.”
But the survey found that immediate benefits accrue to those who start saving early, Kapito said. “Much as physical exercise has both short- and long-term benefits, focusing on retirement planning helps alleviate stress and improves your overall well-being today. Saving for your future retirement pays immediate emotional benefits.”