Only 27% of Americans in a survey released Monday by TIAA said they were confident they would always feel financially secure, including during retirement, and just 35% were very confident they could maintain their lifestyle for as long as they lived.
Baby boomers and men overall were likelier than younger respondents and women to express confidence in these areas.
Various factors are sapping financial confidence among Americans, TIAA said in a statement: uncertainty about the future of social programs and market performance, concerns about unexpected expenses and losses, and fear of saving too little.
Keys to Financial Security
The survey identified several skills and practices that build confidence. Those who rated highly their ability to invest effectively were roughly three times as likely to express confidence in always being financially secure, including throughout retirement.
Long-term planning can also be a confidence builder. Those who said they had mastered this skill were at least twice as likely to feel confident.
The same with good savings habits. Twenty-three percent of respondents cited saving regularly as the top means of boosting financial security.
Millennials and Gen Xers in the survey were likelier to list savings behaviors and understanding debt as factors that build their confidence, while boomers were more likely to select investment diversification and working with a financial advisor as boosters.
The survey found that beyond saving, perhaps the most significant antidote to financial uncertainty was the presence of guaranteed lifetime income through a pension or annuity that secures monthly income for life. TIAA offers annuities.
Nearly all respondents said it was helpful to know how much income besides Social Security they could expect each month in retirement. More than four in five respondents with access to guaranteed income through a pension or income annuity reported an increase in confidence due to their guaranteed lifetime income.
“A major lesson of this survey is that effectively addressing uncertainties is key to feeling financially secure,” Lori Dickerson Fouché, CEO of TIAA Financial Solutions, said in a statement.
“The two best ways of reducing uncertain outcomes are by using financial products that guarantee lifetime income and getting the advice and building the skills needed to deal with adverse events.”
The 2019 TIAA Lifetime Income Survey was conducted by Greenwald & Associates in May and June via an online survey of 901 Americans between the ages of 25 and 73.
The survey found that many Americans are not acting to improve their financial confidence and situation. Some six in 10 respondents said they had not created a written financial plan for retirement.
Fifty-two percent reported that they had not saved as much as they should have in 2018, and 22% had saved “a lot less.” Sixty percent of Gen Xers saved less than enough, compared with only 26% of baby boomers, according to the survey.