|MINNEAPOLIS, April 1, 2004 — American Express Retirement Services today released results from a 2004 National Survey on Financial Stress and Retirement Saving comparing the current findings with results from the same survey conducted in late 2002.
Conducted in conjunction with Synovate and American Express’ Global Marketplace Insights, results from the January 2004 survey revealed that the majority (60 percent) of working Americans, who are employed with a company that offers a retirement plan, indicated they were experiencing moderate to high levels of financial stress. In addition, one fifth of the respondents felt that their financial stress has gotten worse in the last 18 to 24 months. This can be compared to similar figures from the late 2002 survey when 61 percent of working Americans indicated they were experiencing moderate to high levels of financial stress and one quarter felt that their financial stress had gotten worse in the last 18 to 24 months.
“A much improved stock market in 2003 belies the financial pressures that many Americans are living with,” said Rusty Field, vice president of American Express Financial Education and Planning Services. “Increased cost for health care benefits and a poor job outlook throughout the past 12 to 18 months hasn’t offered any respite from financial stress.”
A new question included in the 2004 survey attempted to find possible sources of this financial stress. Respondents indicated that the most frequently cited source of stress was saving enough for retirement (44 percent). Other sources of stress were fairly evenly distributed with 39 percent stressed by dealing with debt, 38 percent stressed by paying regular bills, 31 percent stressed by affording education expenses for their children and 30 percent stressed by the level of their current pay.
The 2004 survey also found that, as in 2002, financial stress continues to prompt many workers to look for more assistance with both their retirement plan saving, and their overall financial situation. More than half of workers with access to 401(k) retirement plans indicated some need for assistance in deciding how to allocate their plan assets.
“The 2004 data shows people are still largely immobilized in tackling their asset allocation decisions,” said Craig Brimhall, vice president of Wealth Strategies at American Express Financial Advisors. “There remains a clear need for investment advice, and for investment products that make asset allocation easier—such as, managed accounts, time horizon and targeted-maturity kinds of fund options. Those that didn’t participate in the 2003 rally clearly lost an opportunity for growth and a long-term asset allocation strategy may have helped prevent that.”
Still, the marked improvement in the stock market may have contributed to an increase in financial self-confidence for some individuals. While the 2004 survey still found a wide range of interest in advice on financial matters, the level of interest declined slightly from 2002 in almost every category at an average of six percent.
The 2004 survey found that 40 to 46 percent indicated an interest in comprehensive financial advice, advice on choosing among plan investment options, advice on accumulating money for retirement, and advice on how to use saved money for retirement income. One quarter to one third of the respondents were interested in advice on 401(k) rollovers, investing in stocks, managing their stock options and saving for education. Interest in debt consolidation remained steady with the 2002 survey—22 percent in 2004 wanted advice on dealing with debt.
“It’s remarkable to see how a stronger market affects people’s interest level in pursing assistance with their financial lives,” said Field. “It’s probably the best time for people to evaluate their finances, set goals for the future and put the pieces in place to achieve them. While it may be human nature to let things ride when times are good, employers and providers need to continue to engage employees to take a proactive and positive role in their financial future.”
As in 2002, the majority of 2004 survey respondents preferred receiving advice by talking one on one with an advisor who comes to the workplace, or by talking to an advisor outside the workplace. In total 53 percent preferred to receive advice directly from an advisor. Other preferences were online tools with 15 percent and group seminars with 14 percent.
“The most effective antidote to financial inertia we’ve found at American Express is making financial advice available in a personal way—in the workplace, outside of the workplace or over the phone,” said Field. “The 2004 survey results confirm that this remains the most preferred approach.”
About the Survey
Synovate conducted the telephone survey of 2,000 nationally representative households receiving a total of 674 qualified consumer responses: 472 were currently enrolled in a company sponsored retirement plan, and 202 had employers that offered a retirement plan but were not currently participating in the plan. The American Express Global Marketplace Insights research group provided data analysis and a report of the findings.
American Express Financial Advisors Inc. popularized early saving and investing programs for working people more than 100 years ago, helping give rise to financial planning, mutual funds and retirement plans in the past century. Today, American Express continues its commitment to individuals and corporations with its Financial Education & Planning Services unit of American Express Retirements services, which delivers comprehensive financial education programs to organizations ranging from small businesses to Fortune 500 corporations. American Express Financial Education & Planning Services provides Web, phone, print and face-to-face education, guidance and advice to more than 2 million workers nationwide.
American Express Retirement Services, a service group of American Express Financial Advisors Inc., provides corporations, unions and municipalities, and their more than 1 million workers nationwide with a complete package of financial education, recordkeeping, investments and trustee services for their qualified retirement plans. For more information on American Express Retirement Services, visit www.americanexpress.com/sponsors.
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First use 4/1/2004
Registered investments and financial planning services are offered through American Express Financial Advisors Inc., Member NASD. American Express Company is separate from American Express Financial Advisors Inc. and is not a broker-dealer. Retirement plan and trust-related services are offered through American Express Trust Company.