Good News: US Investors Are Saving At Least 10% Annually For Retirement According To Schroders Global Investor Study 2020

New York, NY – November 24, 2020 – According to the 2020 Schroders Global Investor Study, the majority (51%) of US investors said reaching the age to qualify for Social Security would be the reason they retire, while only 4% said hitting their financial target for retirement savings would be the trigger.

At the same time, 62% said they know Social Security benefits won’t be enough to live on, and 48% are concerned about not having enough income in retirement.

Perhaps that’s why 70% of investors report saving at least 10% of their annual income specifically for retirement.

It may also be why far more US investors (35%) would invest disposable income into their retirement savings or another type of investment, like equities or bonds (27%) than spend it on a luxury item purchase (5%).

“It’s very encouraging to see so many investors telling us they are saving at least 10% each year for their retirement, especially when you consider this survey was taken as COVID-19 was spreading in the second quarter,” said Joel Schiffman, Head of Intermediary Distribution, North America, Schroders.  “They recognize that Social Security may not be enough, are concerned about having sufficient income when the time comes, and despite today’s challenges, remain focused on ambitious levels of savings for their retirement.”

Mr. Schiffman cautioned that investors who want to retire as soon as they qualify for Social Security might think twice before taking their pay-out benefits too early.

He added: “If investors start taking their benefits as soon as they qualify for Social Security, they could be leaving money on the table. If they are able to delay by just a few years, they could enjoy higher levels of annual Social Security income for the rest of their lives. Judging by their expectations about spending, they may need it.”

When Retired: Investors to Spend Same or More Money;

Many to Work Same or More Hours

Compared to the hours they work today, almost 4 in 10 (37%) investors surveyed expect their working hours per week will stay the same or increase in retirement. 

The majority (56%) also said their spending habits in retirement will increase or remain the same as they are today.

Investors in retirement report that’s exactly what happened: 51% of retired respondents said their spending increased or stayed the same in retirement. In terms of the hours they work,31% of retirees said their hours stayed the same or increased after retiring.

With Age Comes Wisdom, and an Appetite for Risk?

Perhaps surprisingly, 50% of retired investors added high-risk investments to their portfolios when the markets hit extreme volatility in February and March due to the pandemic. 

Another 28% of retirees stayed the course, making no changes to their portfolios.

About the survey

The Schroders Global Investor Study was conducted in the second quarter of 2020 among over 23,000 investors from 32 locations around the globe. The independent online survey included 1,500 US respondents who will be investing at least $10,000 in the next 12 months and who have made changes to their investments within the last 10 years.

For further information, please contact:

Jennifer Manser, Head of Marketing & Communications, Americas
212-632-2947, Jennifer.Manser@schroders.com

River Communications
Joe Collins, 914-686-5599, jcollins@riverinc.com

Note to Editors

Schroders plc

As a global investment manager, we actively and responsibly manage investments for a wide range of institutions and individuals, to help them meet their financial goals and prepare for the future. The world is forever changing, and with our clients at the centre of everything we do, we understand the need to continue to adapt and evolve our business in line with what matters most to our clients today, and in the future.

Our ongoing success is built on a history of experience and expertise, whereby we partner with our clients to construct innovative products and solutions across our five business areas consisting of Private Assets & Alternatives, Solutions, Mutual Funds, Institutional and Wealth Management and invest in a wide range of assets and geographies. By combining our commitment to active management and focus on sustainability, our strategic capabilities are designed to deliver positive outcomes for our clients.

We are responsible for $649.6 billion* assets of our clients, managed locally by 42 investment teams worldwide. As a global business with over 5,000 talented staff across 37 locations, we are able to stay close to our clients and understand their needs. We have over 200 years of experience in investment and innovation and remain committed to creating a better future by investing responsibly for our clients.

Further information about Schroders can be found at www.schroders.com/us.

Important Information:

The views and opinions stated are those of the individuals quoted and are subject to change.  This document does not purport to provide investment advice and the information contained is for informational purposes and not to engage in any trading activities.  The material is not intended to provide, and should not be relied on for accounting, legal or tax advice, or investment recommendations.    Schroder Investment Management North America Inc. (“SIMNA”) is an SEC registered investment adviser providing asset management products and services to clients in the US and Canada. Schroder Fund Advisors LLC (“SFA”) is a wholly-owned subsidiary of SIMNA Inc. and is registered as a limited purpose broker-dealer with FINRA and markets certain investment vehicles for which SIMNA Inc. is an investment adviser.  SIMNA Inc. and SFA are indirect wholly-owned subsidiaries of Schroders plc, a UK public company with shares listed on the London Stock Exchange. Further information about Schroders can be found at www.schroders.com/us or by calling (212) 641-3800. 

*as of June 30, 2020