News

Affluent Gen Y Prefers Online Brokerage Accounts over DC Plans

Short-Term Goals, Financial Independence Trump Traditional Retirement and Tax-Deferred Savings

(Hingham, MA) – Gen Y[1]’s savings goals drive their preference for liquid investments, reflected in a higher use of online brokerage accounts over defined contribution (DC) plans, according to a new study by Hearts & Wallets, LLC, the preeminent financial research resource for understanding consumer savings and investing needs and behaviors. Gen Y’s investment preferences stem from a desire for financial independence over a traditional leisure retirement, making retirement savings accounts less appealing.

74 percent of Affluent Gen Yers have assets in an online brokerage account versus 67 percent who have assets in a defined contribution plan. Affluent Gen Yers – those with more than $100,000 in household assets – are alone among working age segments in being more likely to invest assets in an online brokerage account than a defined contribution plan. The penalty-free access to capital and far greater investment choices of online brokerage accounts attract Gen Yers, who remain long-term commitment phobic. Read More→

Different Ideas of Retirement Require Different Messages

PLANSPONSOR

Think people are either pre- or post-retirement? Think again. Both include a spectrum of lifestyles and financial situations, research says, that need specific messaging and support from plan sponsors.

A study about retirement funding and household finance from Hearts & Wallets LLC, a financial research company that studies consumer savings and investing behaviors, finds fewer than half of current retirees use personal assets for retirement income. “It’s not possible to understand retirees as a homogenous group,” says Laura Varas, partner at Hearts & Wallets. “Some have pensions, others simply haven’t saved enough to produce substantial income, and still others, of all wealth levels, are successfully funding their lifestyles with different types of savings or annuities.”

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New Study Dispels Two Major Retirement Income Myths

Retirees Come in All Ages and Incomes; Insights to Adapt Financial Services Firm Models

(Hingham, MA) – A new study on retirement funding and household finance breaks two major stereotypes in the financial services industry and calls upon financial services providers and advisors to rethink service models and customer segmentation. The research finds less than half of current retirees use personal assets for retirement income, and shatters the one-size-fits-all perception of retirees – according to Hearts & Wallets, LLC, the preeminent financial research resource for understanding consumer savings and investing needs and behaviors.

“Many Americans view their assets for use only in an emergency rather than as a ‘retirement income source,’ a beloved industry term that isn’t used in casual conversation by ordinary people,” said Laura Varas, Hearts & Wallets LLC partner.

“Retiree diversity is absolutely striking,” Varas continued. “It’s not possible to understand retirees as a homogenous group. Some have pensions, others simply haven’t saved enough to produce substantial income, and still others, of all wealth levels, are successfully funding their lifestyles with different types of savings or annuities. Hearts & Wallets expects retirement income from personal assets will grow in the years ahead. But it will likely be a long time before most retirees generate substantial portions of their income from personal assets, not because this income source is unreliable, but because people’s lifestyles are so diverse.” Read More→