How are millennials investing their money? What factors are influencing retirement satisfaction? The answers to these questions and more have shifted over the past year, due to changes in the economy, markets and investor behavior.
So where do we stand now? Here’s one bite of six important trends affecting investors today.
Millennials’ Money Habits
An increasing number of millennials are choosing to invest in cash for the long term, putting themselves at risk at retirement age without a broadly diversified portfolio.
A Financial Security Index study revealed that a plurality of 18-29-year-olds choose cash as their preferred investment that they won’t touch for at least a decade —triple the number that would choose to passively invest in equities for the long term.1
Despite the conservative approach, young adults are doing better than their parents did by starting to save at a younger age (22 vs. 35 for boomers).2
On the other hand, millennials are ahead of the curve when it comes to saving.
Though they are often stereotyped as bright-eyed idealists, new research reveals that millennials are old souls when it comes to financial planning.
According to Northwestern Mutual, millennials have a clear sense of their financial goals and are more inclined to save than spend — traits they share with their grandparents’ generation.3
The Impact of Health on Wealth in Retirement
For many retirees, the key ingredient to a happy retirement isn’t a new sports car or a vacation home — it’s good health.
New research reveals that 73 percent of retirees in better health feel more financially secure in their golden years, compared to 51 percent of retirees in poorer health.4
Preparing for the Unexpected
Are you financially prepared for a family emergency? Sudden illness? Unemployment?
For many Americans, the answer to these questions is ‘no’.
New research from The Pew Charitable Trusts reveals that more than half of Americans are unprepared for financial emergencies, with one-third of respondents reporting that they have no extra cash stowed away.5
It’s tempting to focus on the here and now of your finances. But it’s just as important to prepare for the financial implications of events you can’t predict, which is where the benefits of a long-term financial plan come into play.
The Impact of Bankruptcy on Future Financial Health
In 2010, roughly 1.5 million Americans filed for consumer bankruptcy protection, with debt relief totaling about $450 billion. So what happened to the debtors after they filed?
Drawing from the results of 500,000 filings and tax records, the National Bureau of Economic Research found that Chapter 13 bankruptcy filings resulted in generally better outcomes for filers that were granted protection, compared to similar persons who were not.6
Of course, there are negative outcomes to consumer bankruptcy protection — including credit ratings, finances and emotional well-being — that this study did not cover.
The True Cost of Hiring New Talent
A winning retention strategy is not only vital to maintaining employee morale, it can also have a big impact on a business’s bottom line.
Aside from salary and benefits, the cost of replacing employees who’ve flown the coop can be upwards of $3,000.7 That can be a hefty expense for many businesses.
We put the price into perspective in the infographic below.
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