Americans would like to save for retirement, but bills keep getting in the way. In fact, Americans are having such a tough time saving for their post-work years, they regard Social Security as critical.
Those are some of the results from BlackRock's Global Investor Pulse Survey, which also found the less-than-cheery news that fewer than half of boomers (just 45 percent) are confident about their financial future and, worse, only about one in four Americans thinks the economy and job market are improving.
The global survey polled 27,500 people in 20 countries across the globe, 4,000 of whom were Americans. And the results were not upbeat for those Americans, who apparently feel the pinch of the high cost of living more keenly than many other respondents.
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The top three threats that Americans see to their financial future are, in fact, that high cost of living (61 percent), followed by the state of the U.S. economy (55 percent) and health care costs (50 percent).
And considering that Americans sink 42 percent of their household income to expenses, compared with worldwide results of only 32 percent, they may have something to complain about. Particularly considering that those expenses take a toll on the money Americans have left for spending, saving and investing — including retirement — it's no wonder people aren't happy.
Three-quarters of Americans report difficulty in managing both to pay their bills and still save for retirement; 43 percent say it's "very hard."
That's why a large majority of people are looking to Social Security as a mainstay of retirement income, with 64 percent saying those benefit checks will be "critical" to their ability to support themselves once they retire.
"It's clear that immediate financial needs are hindering people's ability to focus on longer-term investment decisions and retirement planning," Rob Kapito, president of BlackRock, said in a statement. "Focusing primarily on the short term is concerning for investors of all ages, and can eventually create special risks for those closest to or newly in retirement, who need to be well prepared to spend as much as two or three decades in retirement."
But at the rate they're going, investment income is not going to be the strong support of retirement's finances — getting burned during the financial crisis evidently was far too painful for that.
Only 27 percent of Americans say they're more interested in investing in stocks than they were five years ago, and 18 percent say they're not interested in stocks at all.
Moreover, 35 percent say they don't hold and wouldn't consider investments outside of the U.S., which means they're missing an important opportunity for portfolio diversification — as well as limiting themselves to only about half of the global marketplace.
And despite the fact that interest rates are bottoming out, where have Americans put whatever they can save? Cash, that's where.
On average, said the survey, cash and cash-related products take up nearly two-thirds (63 percent) of Americans' total household savings and investments, with most intending to push that cash ratio even higher over the next 12 months.
That's despite the fact that Americans say that's really too high, reporting an "ideal" level of cash as 29 percent of savings and investments. Globally, however, they're not all that far off the mark; the global average of cash holdings is 59 percent.
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