Two-thirds of American adults have experienced an event or situation that has had a negative effect on their financial plans for the long-term/retirement, including 75% of those under age 25, according to a new report.
The vast majority (84%) of “Disrupted Americans” were saving for the long-term/retirement prior to the disruption, according to TD Ameritrade’s 2015 Financial Disruptions Survey. On average, approximately $530 was being saved per month by these individuals prior to the event.
Disruption Impact
On average, these “Disrupted Americans” reduced their monthly long-term/retirement savings by almost $300 during the disruption, though they continued to save. The disruptions, on average, lasted nearly 4 years and 8 months, causing Americans to miss out on $16,000 they would have saved without the bump in the road, according to the report.
As for what took these individuals off course, the most commonly cited “disruptions” were:
The vast majority (84%) of “Disrupted Americans” were saving for the long-term/retirement prior to the disruption, according to TD Ameritrade’s 2015 Financial Disruptions Survey. On average, approximately $530 was being saved per month by these individuals prior to the event.
Disruption Impact
On average, these “Disrupted Americans” reduced their monthly long-term/retirement savings by almost $300 during the disruption, though they continued to save. The disruptions, on average, lasted nearly 4 years and 8 months, causing Americans to miss out on $16,000 they would have saved without the bump in the road, according to the report.
As for what took these individuals off course, the most commonly cited “disruptions” were:
- 43% — Loss of Employment/Lower Paid Job
- 36% — Planned Family/Home
- 28% — Poor Investment /Business Performance
- 24% — Supporting Others
- 19% — Accident/Illness/Disability/Unable to Work
- 18% — Divorce/Separation/Widowed
- 15% — Education
Aftermath
Roughly one-in-five (21%) of these “Disrupted Americans” do not expect to recover financially from the consequences of the disruption, and about half say they may need to either delay retirement (34%) or forgo it completely (20%).
Before the disruption, respondents were most likely to discuss their financial plans with a spouse or partner (44%), followed by a financial planner or advisor (20%), just ahead of parents/guardians (18%) and friends or colleagues (17%).
Following the disruption:
- 26% checked the performance of investments more frequently
- 18% discussed investments with a financial planner or advisor more frequently
- 17% were more likely to hold investments longer, even if the value fluctuates
On the other hand, 22% said they had not changed the way they managed their investments for the long-term/retirement, and even more (23%) said they did not have any investments for the long-term/retirement.
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