Only 44% of Americans say they are on track or ahead of schedule for retirement savings, according to a recent national financial stress survey conducted by John Hancock. As 401(k)s are an important part of the fabric of retirement savings, it’s key that clients understand the savings level they should be at what age.
The survey of 3,500 workers found that 51% of the participants were behind schedule with retirement savings and 35% were on track, while only 9% were ahead of schedule.
Only 12% of millennials or Gen Z-ers use financial advisors, rising to 21% of Gen Xers and 36% of baby boomers. However, 46% stated they used their own discretion when choosing investments and as many as 23% didn’t pay attention to their retirement savings.
In addition, almost half of workers said they would be more productive if they weren’t so worried about personal finances, and 31% of generations X, Y and Z have no emergency savings.
A review of overall savings should be done twice a year, the report recommends. But a good start is to provide clients the national average of 401(k) savings, gauge where they are and make adjustments from there.
Advisors can help clients understand where they should be in their savings plans and how to get there, which can help alleviate financial stress. In the gallery above are the average account balances by age group and what clients can do to at least attain those levels, according to John Hancock.
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