New York – In what could be bad news for retailers, “mass affluent” consumers (those with $50,000 to $250,000 in investable assets) and Gen Y (age 18-34) are cutting back on spending to save for retirement. According to the Spring 2013 Merrill Edge Report, the average mass affluent investor expects to save $860,000 for retirement but has only saved $150,000. If given an extra $1,000 per month, 50% of mass affluent consumers would put it toward savings or paying down debt.
Meanwhile, Gen Y consumers are starting to save for retirement at age 22 on average (Baby Boomers did not start until age 35 onaverage) and have already saved an average of $55,000 for retirement. Seventy-seven percent of Gen Y consumers plan to increase their retirement savings in thenext 12 months and 57% will invest more in the stock market this year.
“Many mass affluent, particularly young investors, are focusing on their retirement goals by saving earlier and planning now for the lifestyle they want to live during their retirement years,” said Alok Prasad, head of Merrill Edge.