Retirement Savings: Priorities, Strategies, and Barriers...AceYourRetirement.Org, offers a quick and...

AARPORGRESEARCH | copy 2019 AARP ALL RIGHTS RESERVED DOI AARP RESEARCH

A Survey for the AARP Ad Council Saving for Retirement

Campaign

January 2019

httpsdoiorg1026419res00272001

RETIREMENT SAVINGS PRIORITIES

STRATEGIES AND BARRIERS

AARPORGRESEARCH | copy 2019 AARP ALL RIGHTS RESERVED AARP RESEARCH 2

Introduction 3

Key Findings 5

Detailed Findings 7

Implications 16

Methodology 18

Contact 21

Table of Contents


INTRODUCTION

AARPORGRESEARCH | copy 2019 AARP ALL RIGHTS RESERVED AARP RESEARCH

Introduction

4

This survey of moderate-income working adults ages 40-59 was conducted for the AAARPAd

Council Saving for Retirement Campaign from November 28 through December 5 2018

The survey takes a fresh look at recent experiences with and attitudes toward retirement saving

including

bull How many set retirement savings goals in 2018

bull How many were able to save for retirement in 2018

bull For those who didnrsquot save or who didnrsquot meet their goals what were the barriers to saving

bull What are their savings priorities for 2019 and how does retirement saving compare to other

savings priorities

bull In their lifetime do they think theyrsquore more or less likely to learn that Bigfoot has been

confirmed real or save enough for a comfortable retirement

The AARPAd Council Saving for Retirement Campaign which was originally launched in 2017 at

AceYourRetirementOrg offers a quick and easy retirement planning resource ndash in just about

three minutes users can chat with a friendly digital retirement coach Avo to get their

personalized action plan

The survey sample included 1611 employed adults ages 40-59 with household incomes from $40000 to $99999

For more information about the sample see the Methodology section


KEY FINDINGS


Key FindingsFewer than half (47) of moderate-income working adults ages 40-59 say retirement is

one of their top three savings priorities for 2019 When asked for their 1 savings

priority for 2019 respondents most commonly cite paying off debt (33) followed by

saving for retirement (21)

Nearly 3 in 10 (28) think theyrsquore more likely to learn Bigfoot is real than to save enough

for retirement

Seven in ten (69) saved at least some money for retirement in 2018

Four in ten (40) set a retirement savings goal in 2018

Those who set retirement savings goals were more likely to save than those who did

not set goals Of those who set a retirement savings goal 84 were able to save some

money for retirement in 2018 Of those who did not set a goal just 60 saved some

money for retirement

Among those who saved for retirement last year nearly half (48) set a retirement

savings goal Other strategies used by retirement savers last year include

bull Increasing contributions to their employer-sponsored retirement plan to get the full

match (27)

bull Putting extra income raises or bonuses directly into retirement savings (18)

bull Cutting back on everyday expenses and spending (17)

6


DETAILED FINDINGS


More Than Half Cite Paying Off Debt Among Their Top Three

Savings Priorities for 2019

55

47

46

39

30

16

13

10

7

Paying off a significant debt such as a credit cardstudent loan or mortgage

Building up my retirement fund

Building up my emergency fund

Home repairsimprovements

Vacationtravel

Buying a car

My childrens college expenses

Buying a home

None of these

8

bull The focus on paying off debt is particularly high among women (60 vs 51 among men)

bull Overall building retirement funds is on par with setting up an emergency fund in terms of top three 2019 priorities

bull Adults ages 50-59 are especially likely to be focusing on their retirement fund (58 vs 37 of adults ages 40-49)

Q1 Of the following items which if any are your top savings priorities for 2019 Please rank your top three priorities where ldquo1rdquo is your top priority

[Chart displays percentage of respondents who selected each item as priority 1 2 or 3]

Base Full Sample (1611 employed adults ages 40-59 with household incomes from $40000 to $99999)

Building

Retirement Fund

Age 50-59 58

Age 40-49 37

Paying Off Debt

60

51


The 1 Savings Priority Highlights Focus on Paying Off Debt

9

bull Adults age 50-59 (29) are more than twice as likely as adults ages 40-49 (13) to identify building a retirement fund

as their 1 savings priority

bull Among those ages 50-59 paying off debt (31) and building up a retirement fund (29) are nearly tied for the most

common 1 savings priority

33

21

11

9

5

5

4

4





Vacationtravel

Buying a home

Buying a car



[Chart displays percentage of respondents who selected each item as priority 1] Base Full Sample (1611 employed adults ages 40-59 with household incomes from $40000 to $99999)

Building

Retirement Fund

Age 50-59 29

Age 40-49 13

Ages 50-59

Paying off a significant debt 31

Building up my retirement fund 29


Meeting Basic Expenses Was the Main Barrier to Saving for Retirement

10

bull Among those who did not save for retirement in 2018 or did not save enough to meet their 2018 goal taking care of

here-and-now expenses represented the main barrier to saving

Q5 What was the primary reason you werenrsquot able to save for retirement or werenrsquot able to save as much for retirement

as you wanted to in 2018 Base Employed adults ages 40-59 with household incomes from $40000 to $99999 who did not save money for retirement in 2018 or did not save enough to meet

their 2018 goal (n=667)

53

37

10

7

3

10

I did not have enough left over after basic expenses(eg housing food)

Unexpected expenses came up

My savings priorities changed

I just never got around to it

I wasnt sure what steps to take next

None of these

Barriers to Saving for Retirement


Most Were Able to Save for Retirement in 2018

11

bull Seven in ten (69) were able to save some money for retirement in 2018 climbing to three-quarters among higher-

income households

Q2 Were you able to save any money for retirement in 2018


Yes 69

No 30

Were you able to save any money for retirement in 2018

Yes

$40000 - $74999

$75000 - $99999

66

75

Household Income


Those Who Set a Retirement Savings Goal Were More Likely to Save

12

bull In all four in ten (40) respondents set a goal related to saving for retirement in 2018

bull More than eight in ten (84) of those who set a retirement savings goal last year actually saved some money for

retirement in 2018 compared to just six in ten (60) of those who did not set a goal

Base Full Sample (1611 employed adults ages 40-59 with household incomes from $40000 to $99999) Charts display calculations from the following questions Q3a (asked of retirement

savers) Which of these statements best describe you This past year I set a goal related to saving for retirement and successfully reached my goal This past year I set a goal related to

saving for retirement and although I did not reach my goal I was able to save for retirement This past year I did not set a goal related to saving for retirement but I did save for retirement

Q3b (asked of those who did not save for retirement in 2018) Which of these statements best describe you This past year I set a goal related to saving for retirement but was not able to

save anything for retirement This past year I did not set a goal related to saving for retirement and I did not save for retirement

Yes 40

No 60

How many set a retirement savings goal

in 2018

84

60

16

40

Those Who Set A Retirement SavingsGoal (n=639)

Those Who Did NOT Set a RetirementSavings Goal (n=962)


Yes No


Retirement Savers Focus on Getting Their Employerrsquos Full Match

Putting Away Extra Money for Retirement and Reducing Expenses

13

bull Nearly half (48) of those who saved for retirement in 2018 set a retirement savings goal last year

bull Other steps that retirement savers took in 2018 to help themselves save included increasing their contribution to their

employer-sponsored plan in order to qualify for their employerrsquos full match putting extra income directly into their retirement

savings (18) and reducing expenses and spending so that they could increase their retirement savings contributions (17)

Bar chart displays responses to Q4 What did you do in 2018 that helped you save for retirement Base Employed adults

ages 40-59 with household incomes from $40000 to $99999 who saved money for retirement in 2018 (n=1186)

27

18

17

10

9

8

6

33

I increased my contribution rate to my employer-sponsored retirementplan so that I could get the full amount that my company matches

I got a raise bonus or extra income and put all or some of it directlyinto my retirement savings

I reduced my everyday expenses and spending so I could increase mycontributions to my retirement savings account

I maxed out my contributions to my retirement accounts to the full limitallowed by the IRS

I made additional catch-up contributions to my retirement accounts asallowed by the IRS (50+ only n=681)

I set up for the first time automatic transfers from my paycheck or bankaccount to my retirement savings

I rolled over an old retirement plan (like 401(k) or 403(b) into my IRA ormy new employers plan

None of these

Strategies Used to Save for Retirement

Set a goal 48

Did NOT set a goal 52

How many retirement savers in 2018 set a goal

Pie Chart displays calculations from Q3a

Base Employed adults ages 40-59 with household incomes from

$40000 to $99999 who saved for retirement in 2018 (n=1186)


30

30

40

37

28

7

7

6

5

7

63

63

54

58

65

I will run a marathon

I will get a personal robot assistant

An astronaut will walk on Mars

Disco will come back in style

Bigfoot will be confirmed real

Itrsquos More Likely That

Selected Red Scenario Refused I will save enough to retire comfortably

I will save enough to retire

comfortably

14

bull Adults with lower household incomes were more likely than those with higher incomes to feel this way (31 of those

with incomes from $40000 to $74999 compared to 25 of those with incomes from $75000 to $99999)

Q6 Within my lifetime itrsquos more likely thathellip


For Nearly 3 in 10 (28) the Likelihood of Bigfoot Being Confirmed Real Seems Higher than

the Likelihood of Saving Enough for a Comfortable Retirement


Volunteering Ranks High in Interest if They Were to Retire in 2019

15

bull There is interest in enjoying the outdoors while unplugging from technology (15)

bull A smattering of new learnings and experiences round out retirement interests

Q7 If you could retire in 2019 which of the following would you most want to do next


21

15

7

5

4

3

2

2

2

2

37

Volunteer for a good cause

Unplug from technology for a month and enjoy nature

Ride a motorcycle across the country

Learn a new language

Write a novel

Start a charitable organization

Go skydiving

Open a Bed amp Breakfast

Train to run a marathon

Cook every recipe in my favorite cookbook

None of these


IMPLICATIONS


Implications

Moderate-income working adults ages 40-59 face a variety of financial

pressures including the challenge of covering basic expenses and

unexpected expenses as well as paying off significant debts As a

result building a retirement fund often takes a back seat to more

immediate financial needs

However despite these challenges most adults in this age group were

able to save something for retirement last year The survey suggests

that the mere act of setting a retirement savings goal may be an

important step in getting people to focus on the longer-term and save

for retirement Other strategies that appear useful include putting part

or all of bonuses or extra income directly into retirement savings

accounts and reducing everyday expenses and spending

Although many face competing financial demands that may interfere

with retirement savings these survey results suggest that certain

behaviors along with goal setting may hold promise for building

retirement saving

17


METHODOLOGY


Methodology

bull Objectives To explore the steps that moderate-income working

adults ages 40-59 took in 2018 to save for retirement as well as the

role of goal setting and the barriers to building retirement savings

bull Methodology Online survey via the Ipsos KnowledgePanelreg with

sample targeting panelists age 40-59

bull Qualifications Age 40-59 employed household income of $40000

to $99999

bull Sample Size n=1611

bull Interviewing Dates November 28-December 5 2018

bull Weighting The data is weighted by gender age raceethnicity

education region income and metro area to be nationally

representative of employed adults ages 40-59 with household

incomes of $40000- $99999

bull Questionnaire length Overall 5 minutes (median)

bull Confidence Interval Total sample +- 329 percentage points

19


About AARPAARP is the nationrsquos largest nonprofit nonpartisan organization dedicated to empowering Americans 50 and older to

choose how they live as they age With nearly 38 million members and offices in every state the District of Columbia

Puerto Rico and the US Virgin Islands AARP works to strengthen communities and advocate for what matters most

to families with a focus on health security financial stability and personal fulfillment AARP also works for individuals in

the marketplace by sparking new solutions and allowing carefully chosen high-quality products and services to carry

the AARP name As a trusted source for news and information AARP produces the nations largest circulation

publications AARP The Magazine and AARP Bulletin To learn more visit wwwaarporg or follow AARP and

AARPadvocates on social media

The Ad Council brings together the most creative minds in advertising and media to address the most worthy causes

Its innovative pro bono social good campaigns raise awareness They inspire action They save lives To learn more

visit AdCouncilorg follow the Ad Councilrsquos communities on Facebook and Twitter and view the creative on YouTube

About The Ad Council


S Kathi Brown AARP Research

skbrownaarporg

For media inquiries please contact mediaaarporg

This research was designed by the Ad Council and AARP

21


Introduction 3

Key Findings 5

Detailed Findings 7

Implications 16

Methodology 18

Contact 21

Table of Contents


INTRODUCTION


Introduction

4




including





savings priorities










KEY FINDINGS







for retirement










match (27)



6


DETAILED FINDINGS




55

47

46

39

30

16

13

10

7





Vacationtravel

Buying a car


Buying a home

None of these

8







Building

Retirement Fund

Age 50-59 58

Age 40-49 37

Paying Off Debt

60

51



9





33

21

11

9

5

5

4

4





Vacationtravel

Buying a home

Buying a car




Building

Retirement Fund

Age 50-59 29

Age 40-49 13

Ages 50-59





10






53

37

10

7

3

10






None of these




11


income households



Yes 69

No 30


Yes

$40000 - $74999

$75000 - $99999

66

75

Household Income



12









Yes 40

No 60


in 2018

84

60

16

40




Yes No




13







27

18

17

10

9

8

6

33








None of these


Set a goal 48







30

30

40

37

28

7

7

6

5

7

63

63

54

58

65









comfortably

14









15





21

15

7

5

4

3

2

2

2

2

37





Write a novel


Go skydiving




None of these


IMPLICATIONS


Implications
















retirement saving

17


METHODOLOGY


Methodology







to $99999






incomes of $40000- $99999



19
















skbrownaarporg



21


INTRODUCTION


Introduction

4




including





savings priorities










KEY FINDINGS







for retirement










match (27)



6


DETAILED FINDINGS




55

47

46

39

30

16

13

10

7





Vacationtravel

Buying a car


Buying a home

None of these

8







Building

Retirement Fund

Age 50-59 58

Age 40-49 37

Paying Off Debt

60

51



9





33

21

11

9

5

5

4

4





Vacationtravel

Buying a home

Buying a car




Building

Retirement Fund

Age 50-59 29

Age 40-49 13

Ages 50-59





10






53

37

10

7

3

10






None of these




11


income households



Yes 69

No 30


Yes

$40000 - $74999

$75000 - $99999

66

75

Household Income



12









Yes 40

No 60


in 2018

84

60

16

40




Yes No




13







27

18

17

10

9

8

6

33








None of these


Set a goal 48







30

30

40

37

28

7

7

6

5

7

63

63

54

58

65









comfortably

14









15





21

15

7

5

4

3

2

2

2

2

37





Write a novel


Go skydiving




None of these


IMPLICATIONS


Implications
















retirement saving

17


METHODOLOGY


Methodology







to $99999






incomes of $40000- $99999



19
















skbrownaarporg



21


Introduction

4




including





savings priorities










KEY FINDINGS







for retirement










match (27)



6


DETAILED FINDINGS




55

47

46

39

30

16

13

10

7





Vacationtravel

Buying a car


Buying a home

None of these

8







Building

Retirement Fund

Age 50-59 58

Age 40-49 37

Paying Off Debt

60

51



9





33

21

11

9

5

5

4

4





Vacationtravel

Buying a home

Buying a car




Building

Retirement Fund

Age 50-59 29

Age 40-49 13

Ages 50-59





10






53

37

10

7

3

10






None of these




11


income households



Yes 69

No 30


Yes

$40000 - $74999

$75000 - $99999

66

75

Household Income



12









Yes 40

No 60


in 2018

84

60

16

40




Yes No




13







27

18

17

10

9

8

6

33








None of these


Set a goal 48







30

30

40

37

28

7

7

6

5

7

63

63

54

58

65









comfortably

14









15





21

15

7

5

4

3

2

2

2

2

37





Write a novel


Go skydiving




None of these


IMPLICATIONS


Implications
















retirement saving

17


METHODOLOGY


Methodology







to $99999






incomes of $40000- $99999



19
















skbrownaarporg



21


KEY FINDINGS







for retirement










match (27)



6


DETAILED FINDINGS




55

47

46

39

30

16

13

10

7





Vacationtravel

Buying a car


Buying a home

None of these

8







Building

Retirement Fund

Age 50-59 58

Age 40-49 37

Paying Off Debt

60

51



9





33

21

11

9

5

5

4

4





Vacationtravel

Buying a home

Buying a car




Building

Retirement Fund

Age 50-59 29

Age 40-49 13

Ages 50-59





10






53

37

10

7

3

10






None of these




11


income households



Yes 69

No 30


Yes

$40000 - $74999

$75000 - $99999

66

75

Household Income



12









Yes 40

No 60


in 2018

84

60

16

40




Yes No




13







27

18

17

10

9

8

6

33








None of these


Set a goal 48







30

30

40

37

28

7

7

6

5

7

63

63

54

58

65









comfortably

14









15





21

15

7

5

4

3

2

2

2

2

37





Write a novel


Go skydiving




None of these


IMPLICATIONS


Implications
















retirement saving

17


METHODOLOGY


Methodology







to $99999






incomes of $40000- $99999



19
















skbrownaarporg



21







for retirement










match (27)



6


DETAILED FINDINGS




55

47

46

39

30

16

13

10

7





Vacationtravel

Buying a car


Buying a home

None of these

8







Building

Retirement Fund

Age 50-59 58

Age 40-49 37

Paying Off Debt

60

51



9





33

21

11

9

5

5

4

4





Vacationtravel

Buying a home

Buying a car




Building

Retirement Fund

Age 50-59 29

Age 40-49 13

Ages 50-59





10






53

37

10

7

3

10






None of these




11


income households



Yes 69

No 30


Yes

$40000 - $74999

$75000 - $99999

66

75

Household Income



12









Yes 40

No 60


in 2018

84

60

16

40




Yes No




13







27

18

17

10

9

8

6

33








None of these


Set a goal 48







30

30

40

37

28

7

7

6

5

7

63

63

54

58

65









comfortably

14









15





21

15

7

5

4

3

2

2

2

2

37





Write a novel


Go skydiving




None of these


IMPLICATIONS


Implications
















retirement saving

17


METHODOLOGY


Methodology







to $99999






incomes of $40000- $99999



19
















skbrownaarporg



21


DETAILED FINDINGS




55

47

46

39

30

16

13

10

7





Vacationtravel

Buying a car


Buying a home

None of these

8







Building

Retirement Fund

Age 50-59 58

Age 40-49 37

Paying Off Debt

60

51



9





33

21

11

9

5

5

4

4





Vacationtravel

Buying a home

Buying a car




Building

Retirement Fund

Age 50-59 29

Age 40-49 13

Ages 50-59





10






53

37

10

7

3

10






None of these




11


income households



Yes 69

No 30


Yes

$40000 - $74999

$75000 - $99999

66

75

Household Income



12









Yes 40

No 60


in 2018

84

60

16

40




Yes No




13







27

18

17

10

9

8

6

33








None of these


Set a goal 48







30

30

40

37

28

7

7

6

5

7

63

63

54

58

65









comfortably

14









15





21

15

7

5

4

3

2

2

2

2

37





Write a novel


Go skydiving




None of these


IMPLICATIONS


Implications
















retirement saving

17


METHODOLOGY


Methodology







to $99999






incomes of $40000- $99999



19
















skbrownaarporg



21




55

47

46

39

30

16

13

10

7





Vacationtravel

Buying a car


Buying a home

None of these

8







Building

Retirement Fund

Age 50-59 58

Age 40-49 37

Paying Off Debt

60

51



9





33

21

11

9

5

5

4

4





Vacationtravel

Buying a home

Buying a car




Building

Retirement Fund

Age 50-59 29

Age 40-49 13

Ages 50-59





10






53

37

10

7

3

10






None of these




11


income households



Yes 69

No 30


Yes

$40000 - $74999

$75000 - $99999

66

75

Household Income



12









Yes 40

No 60


in 2018

84

60

16

40




Yes No




13







27

18

17

10

9

8

6

33








None of these


Set a goal 48







30

30

40

37

28

7

7

6

5

7

63

63

54

58

65









comfortably

14









15





21

15

7

5

4

3

2

2

2

2

37





Write a novel


Go skydiving




None of these


IMPLICATIONS


Implications
















retirement saving

17


METHODOLOGY


Methodology







to $99999






incomes of $40000- $99999



19
















skbrownaarporg



21



9





33

21

11

9

5

5

4

4





Vacationtravel

Buying a home

Buying a car




Building

Retirement Fund

Age 50-59 29

Age 40-49 13

Ages 50-59





10






53

37

10

7

3

10






None of these




11


income households



Yes 69

No 30


Yes

$40000 - $74999

$75000 - $99999

66

75

Household Income



12









Yes 40

No 60


in 2018

84

60

16

40




Yes No




13







27

18

17

10

9

8

6

33








None of these


Set a goal 48







30

30

40

37

28

7

7

6

5

7

63

63

54

58

65









comfortably

14









15





21

15

7

5

4

3

2

2

2

2

37





Write a novel


Go skydiving




None of these


IMPLICATIONS


Implications
















retirement saving

17


METHODOLOGY


Methodology







to $99999






incomes of $40000- $99999



19
















skbrownaarporg



21



10






53

37

10

7

3

10






None of these




11


income households



Yes 69

No 30


Yes

$40000 - $74999

$75000 - $99999

66

75

Household Income



12









Yes 40

No 60


in 2018

84

60

16

40




Yes No




13







27

18

17

10

9

8

6

33








None of these


Set a goal 48







30

30

40

37

28

7

7

6

5

7

63

63

54

58

65









comfortably

14









15





21

15

7

5

4

3

2

2

2

2

37





Write a novel


Go skydiving




None of these


IMPLICATIONS


Implications
















retirement saving

17


METHODOLOGY


Methodology







to $99999






incomes of $40000- $99999



19
















skbrownaarporg



21



11


income households



Yes 69

No 30


Yes

$40000 - $74999

$75000 - $99999

66

75

Household Income



12









Yes 40

No 60


in 2018

84

60

16

40




Yes No




13







27

18

17

10

9

8

6

33








None of these


Set a goal 48







30

30

40

37

28

7

7

6

5

7

63

63

54

58

65









comfortably

14









15





21

15

7

5

4

3

2

2

2

2

37





Write a novel


Go skydiving




None of these


IMPLICATIONS


Implications
















retirement saving

17


METHODOLOGY


Methodology







to $99999






incomes of $40000- $99999



19
















skbrownaarporg



21



12









Yes 40

No 60


in 2018

84

60

16

40




Yes No




13







27

18

17

10

9

8

6

33








None of these


Set a goal 48







30

30

40

37

28

7

7

6

5

7

63

63

54

58

65









comfortably

14









15





21

15

7

5

4

3

2

2

2

2

37





Write a novel


Go skydiving




None of these


IMPLICATIONS


Implications
















retirement saving

17


METHODOLOGY


Methodology







to $99999






incomes of $40000- $99999



19
















skbrownaarporg



21




13







27

18

17

10

9

8

6

33








None of these


Set a goal 48







30

30

40

37

28

7

7

6

5

7

63

63

54

58

65









comfortably

14









15





21

15

7

5

4

3

2

2

2

2

37





Write a novel


Go skydiving




None of these


IMPLICATIONS


Implications
















retirement saving

17


METHODOLOGY


Methodology







to $99999






incomes of $40000- $99999



19
















skbrownaarporg



21


30

30

40

37

28

7

7

6

5

7

63

63

54

58

65









comfortably

14









15





21

15

7

5

4

3

2

2

2

2

37





Write a novel


Go skydiving




None of these


IMPLICATIONS


Implications
















retirement saving

17


METHODOLOGY


Methodology







to $99999






incomes of $40000- $99999



19
















skbrownaarporg



21



15





21

15

7

5

4

3

2

2

2

2

37





Write a novel


Go skydiving




None of these


IMPLICATIONS


Implications
















retirement saving

17


METHODOLOGY


Methodology







to $99999






incomes of $40000- $99999



19
















skbrownaarporg



21


IMPLICATIONS


Implications
















retirement saving

17


METHODOLOGY


Methodology







to $99999






incomes of $40000- $99999



19
















skbrownaarporg



21


Implications
















retirement saving

17


METHODOLOGY


Methodology







to $99999






incomes of $40000- $99999



19
















skbrownaarporg



21


METHODOLOGY


Methodology







to $99999






incomes of $40000- $99999



19
















skbrownaarporg



21


Methodology







to $99999






incomes of $40000- $99999



19
















skbrownaarporg



21
















skbrownaarporg



21

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