Rising Costs Eating Into Retirement Savings: CFP Board Poll

What You Need to Know

The ability to save money is a concern for over 80% of respondents in a new survey.
The survey finds that young adults are more likely to seek the counsel of a financial planner than older adults.

Cost-of-living increases are eating into consumers’ ability to save for retirement, according to a newly released survey conducted by the Certified Financial Planner Board of Standards.

The ability to save money is a concern for many Americans (82%), the CFP Board Consumer Sentiment Survey on the cost of living recently found.

This concern increases for those 45 and older (86% versus 78% overall), perhaps because of the shorter time period they have to save, the survey states.

The concern is also true for current savings or emergency funds — 75% of those 45 and older are concerned compared to 68% of those under 45.

“With 69% of consumers concerned about preparing for retirement, one-third (34%) have saved more for retirement this past year,” the survey states. “Despite the increase in savings, consumers concerned about retirement preparation may benefit from consulting a CFP professional.”

Over the past year, 27% diversified their portfolios, 21% pushed back retirement and 16% purchased long-term care insurance, the survey found.

“These past several years have not been easy for Americans,” CFP Board CEO Kevin Keller said in releasing the survey. “From the pandemic to the latest banking news, uncertainty has been prevalent.”

This uneasiness, Keller added, “increases the need for competent and ethical financial advice. CFP professionals are uniquely positioned to meet this demand and help American consumers navigate uncertainty while prioritizing their short- and long-term financial goals.”

Other Issues

Debt remains a major challenge for Americans, according to the survey.

Americans are most concerned about credit card debt (96%) and medical debt (78%). Amidst the student loan crisis, only 23% are concerned about student debt, with that number increasing to 40% for consumers under 45, the survey states.

Younger generations are also more likely to make decisions that could hurt in the long term. Investors under 45 were more likely to delay credit card payments (29% versus 17%) and delay loan payments (25% versus 16%), the survey found.

“However, both generations were likely to withdraw money from a retirement account (24% of those under 45, 23% of those 45 and older). Those actions could have negative consequences,” the survey relayed.

While younger consumers could benefit from financial advice to avoid these types of actions, the survey shows that they were proactive in establishing or adding to an emergency savings account (49% versus 42%) and invested in the stock market to take advantage of potential growth (37% versus 31%).

More than half of American consumers (53%) currently work or have worked with a financial planner.

Young adults (38%), however, are more likely to seek the counsel of a financial planner in the future than older adults (22%), the survey said.