Americans Worry About Living in Poverty in Old Age
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What is the main topic discussed in this episode?
With your money briefing, I'm Charlie Turner in New York for The Wall Street Journal. A new Wells Fargo survey finds many U.S. workers worry that they won't have enough money for retirement past the age of 85. J.R. Whalen will have our interview with Wells Fargo Asset Management's Frederick Axeter. First, here are some money headlines. Seattle's once-hot housing market is slumping. Seattle's been the sole home of Amazon.com, but it will soon be one of three headquarters for the e-commerce giant. That and other factors are soaking real estate prices in the famously rainy city. The number of unsold homes in Washington State's King County has doubled in just a year and nearly tripled for condominiums, according to the Seattle Times.
In the city of Seattle itself, median home prices are down by a whopping $80,000 since the spring. Though it is no consolation for people trying to sell, we should say that Seattle is still an expensive place to live. The total number of U.S. companies going public has fallen by 50 percent over the last 20 years.
What do new Wells Fargo survey results reveal about fears of outliving retirement savings?
Is this bad for the economy? Stacey Cunningham, the chief operating officer of the New York Stock Exchange, thinks it is. She spoke at the Wall Street Journal's Tech D Live conference in Laguna Beach, California.
I'm concerned about it. It leads to a bifurcation of wealth in this nation. The companies that are coming to the markets and growing are raising money so that they can scale their products and services and make them available to the masses and not just the few with means. So they can do that in the private markets. Investors don't get to share in their success if they're the everyday investor. So if they stay private longer, it means that once they come to the market, they've already had their massive growth trajectory. And that's when the everyday investor can come in.
How does having a 'retirement planning mindset' change retirement outcomes?
And so our concern is that we're creating a market structure that is really good for large investors and large companies and less good for small to midsize investors and small to midsize companies.
Cunningham says the benefits of being a public company outweigh the obligations. For more on the DLive conference, head to WSJ.com. Still ahead, a new survey finds workers fear living into old age means financial hardship. J.R. Whelan will have the interview with Wells Fargo's Frederick Axeter. This is your Money Briefing from The Wall Street Journal.
Who doesn't want to live a nice long life? But about 40% of people surveyed for this year's Wells Fargo retirement study say living past age 85 would be a financial hardship. Frederick Axeter is head of strategic business segments at Wells Fargo Asset Management and has some ideas on how Americans can better prepare for retirement. and perhaps live comfortably past age 85. So, Frederick, one of the hallmarks of this year's retirement study is that people should have a retirement planning mindset.
What four key planning questions indicate someone has a solid retirement plan?
What does that entail?
It means that you should have a combination of both short-term and long-term financial goals. And when you do that, it entails answering yes, feeling comfortable answering yes to a series of four questions. You see some extraordinary results.
What are those four questions?
It's a both having a financial plan long term. It looks at one to one to two year horizon and also making sure that you're looking at kind of on a month to month budget and meeting that budget as well. And when you do that, you have three times the the savings levels. You're twice as likely to say that you thrive, and also 42% less likely to say that you're undergoing significant financial stress.
Was there a particular result from the survey that surprised you?
There were actually two things that surprised me. And they both have, it's about 70% of investors that first of all say that they want help. And so there is a great demand from investors. And also the most important thing for them to get help with, again, 70% of investors are saying this, is to not run out of money in retirement.
And in the results of this study, having a planning mindset seems to be very crucial, especially among higher earners.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:05–1:04
2
What do new Wells Fargo survey results reveal about fears of outliving retirement savings?
1:04–1:45
3
How does having a 'retirement planning mindset' change retirement outcomes?
1:45–2:51
4
What four key planning questions indicate someone has a solid retirement plan?
2:51–7:23
5
How do defined contribution plans and 401(k)s influence retirement security?
7:23–10:01
Speakers
3 identifiedMore from WSJ Your Money Briefing
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