Speaker 1: You're listening to Bloomberg Business Week with Carol Masser and
Speaker 1: Jason Kelly on Bloomberg Radio. Havefullily retired? Now array for
Speaker 1: you retired? Well, I guess some people may be doing
Speaker 1: a little dance when they retire, but maybe fewer people
Speaker 1: than you think. And that's because maybe they haven't saved
Speaker 1: enough money and how they save it is changing. Let's
Speaker 1: get into that with Frederick Acciter. He is the head
Speaker 1: of the institutional client group at a Wells Fargo Asset
Speaker 1: Management based in San Francisco. Here with me in New
Speaker 1: York City in our Bloomberg Interactive Brokers studio today. So
Speaker 1: great to have you with me. Thank you and thanks
Speaker 1: for all right. So you have done a retirement study,
Speaker 1: your tenth annual Wells Fargo's tenth annual, and I have
Speaker 1: to say, reading through some of the details of it,
Speaker 1: there are some things that really jump out, most notably
Speaker 1: how much money people have saved by generation, or in
Speaker 1: some cases not saved. That's exactly right. I mean, we're
Speaker 1: seeing a fundamental shift in the retirement landscape with more
Speaker 1: and more responsibility to the to all of us too.
Speaker 1: We have to fund our own retirement, so Interestingly, eight
Speaker 1: six percent of today's retirees are saying that that that
Speaker 1: either social security or traditional pension plan is a primary
Speaker 1: source of income in retirement. And then that of course
Speaker 1: goes down dramatically for for other for for younger generations.
Speaker 1: And that brings us to to your really to your
Speaker 1: question of the mismatch between savings and safety what people
Speaker 1: have saved and what they perceive they will need to
Speaker 1: have a safe retirement. So take Generation X as an example.
Speaker 1: On average, they've saved sixty six thousand dollars and they
Speaker 1: say that they will need seven two thousand dollars in
Speaker 1: order to safety retire. It's eleven times more. Wow, So
Speaker 1: is the mismatch owing to people saying just not getting it.
Speaker 1: I mean I have to say I and many many
Speaker 1: things to my wife for this and our financial planet,
Speaker 1: like we're pretty maniacal about it. Um And you know,
Speaker 1: a lot of it is about just the math of Okay,
Speaker 1: save now, and it grows and hopefully with markets cooperating
Speaker 1: in things like that. But why aren't people saving? Is
Speaker 1: it that they can't or that they just don't. I
Speaker 1: think it's always a combination, but it's it's you know,
Speaker 1: we have to kind of step back and say that
Speaker 1: that most people they don't have the knowledge or interest
Speaker 1: or time, you know, to to also save. It's difficult.
Speaker 1: But what we find is that when people have a
Speaker 1: combination of a long term financial goal and a sense
Speaker 1: of taking action, what we call when people are in
Speaker 1: the planning mindset, extraordinary things happen. That's when you see
Speaker 1: a real change in terms of savings behavior and just
Speaker 1: success from a financial standpoint. And so are you seeing
Speaker 1: the next generations? Are I'm Generation X? Are the younger
Speaker 1: generations than me? Saving more less? How is it trending?
Speaker 1: The trend is in many ways favorable. Actually, Generation X
Speaker 1: stends out is the most vulnerable generation. We're kind of
Speaker 1: sandwiched in between two systems of having a traditional defined
Speaker 1: benefit plan or auto enrollments and automatically being enrolled in
Speaker 1: plants every younger younger generations, so millennials, for example, they
Speaker 1: started saving six years earlier than Generation X, so they're
Speaker 1: better off from that standpoint. They're more of them that
Speaker 1: feel like they're on track for secure retirements as well.
Speaker 1: Almost in every way they they're a little bit better
Speaker 1: off than Generation X. And is that in part because
Speaker 1: companies are doing a better job essentially sort of making
Speaker 1: it more obvious and clearer what their employees need to do. Yes,
Speaker 1: that's exactly what I mean. More and more companies now
Speaker 1: are saying that as soon as you start working there,
Speaker 1: you're automatically do nothing and you still have a sense
Speaker 1: of taking action. Right, and so what else needs to
Speaker 1: be done? What? What? What's the best single piece of
Speaker 1: advice you can give somebody if they're listening to this
Speaker 1: and they say, I'm gen x, I'm right where you're
Speaker 1: talking about or on the lower end, is it just
Speaker 1: about kind of taking that first step? What do they
Speaker 1: need to do? Yeah? That that is? That? Is that
Speaker 1: the really the answer? I mean we find again this
Speaker 1: planning mindset, combination of a long term goal and a
Speaker 1: sense of taking action. When you do that, extraordinary things happen.
Speaker 1: And that's when you have more than twice the savings.
Speaker 1: You have twice as likely to say, on track for
Speaker 1: a secure tirement. So whatever you can do is sit down,
Speaker 1: establish a financial plan. You know that long term goal,
Speaker 1: Try to find waste to take action. I mean, maybe
Speaker 1: that's a roll in your four one K plan, or
Speaker 1: start saving a little bit more, start paying down debt.
Speaker 1: Debt is a big problem as well, so start taking
Speaker 1: actions so that it's less overwhelming, right, all right, very
Speaker 1: very good advice, and a survey worth checking out because
Speaker 1: it really sort of lays it all out very nicely.
Speaker 1: Frederick Exeter is head of Institutional of the Institutional Client
Speaker 1: Group excuse me, at Wells Fargo Asset Management, based out
Speaker 1: in the City by the Bay, San Francisco. Here in
Speaker 1: New York City today