CHARLOTTE, N.C., Oct. 22, 2018 -- According to a new survey from Ally Invest, the online trading and automated investing arm of Ally Financial Inc., nearly two-thirds of survey respondents (65%) say they find investing in the stock market to be scary and/or intimidating, up from 61% in a similar survey during the same period last year. Fear is highest among Gen Z and millennial consumers: 69% for those ages 18-23 and 66% for those ages 24-37.
Most U.S. adults (69%) say when it comes to investing, they worry whether they are doing the right thing. Again, worry levels have increased from last year when less than two-thirds (63%) felt this way. In addition to these concerns around investing, most survey respondents say they'll be relying on Social Security in their retirement but have doubts the benefit will still be available to those currently 50 years old and younger.
"The survey results point to a serious dilemma: most Americans don't see Social Security as a long-term solution, yet many are still banking on it for their retirement, so something's going to have to give," said Rich Hagen, president of Ally Invest. "People can no longer afford to sit by and hope there will be a safety net to support them or that they will be healthy enough to continue earning an income well into their senior years. Everyone, particularly young adults, needs to adopt a proactive mindset and have a plan."
What are respondents scared of?
- Making a wrong call: Over half of those polled (52%) are scared of the thought of making a bad investment and losing money. Of the survey respondents, 72% of women, 65% of men and more than 70% those classified as Gen Z or millennials have this fear.
- Trusting the wrong source: One-third (34%) of respondents are scared of not knowing whom to trust for advice.
- Lacking the funds: One-third (33%) find the amount of money required to invest scary.
- Knowing where to start: Over one-quarter (27%) are scared about not knowing how to get started.
- Having the time: 19% are scared about the time it takes to invest properly.
- Timing it wrong: 17% are scared the market has passed them by and is going to go down.
- Nothing: Only 15% say they're not scared of anything when it comes to investing.
"The good news for consumers is there are many more affordable and accessible options for investing today that can take the anxiety out of the process," added Hagen. "When we survey our customers at Ally Invest, 70% say online investing has helped them improve their financial position, 81% say it has made the process less intimidating, and 89% say it's made it easier to manage their investments. So there is light at the end of the tunnel for those who look for it and act proactively."
What sources are people currently planning to rely on for retirement?
- Social Security: Three in five (59%)
- Savings: Over two in five (45%)
- 401(k): One-third (33%)
- Pension: Nearly one-quarter (23%)
- Investments in stocks and bonds: Nearly one-quarter (23%)
- IRA: One in five (21%)
- Real Estate/Home Sale: One in ten (11%)
- Nothing: One in ten (11%) say they will rely on none of these because they are not planning to retire.
While Social Security is the source of income on which most Americans are counting for retirement, three in five (59%) also express belief that when people who are under 50 retire, social security will most likely not be paying money to retirees any longer.
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Survey Methodology: The online survey was conducted by Regina Corso Consulting on behalf of Ally Financial between September 4 and 6, 2018, among 2,100 U.S. adults, aged 18 and older. Figures for age, gender, education, income, employment and region were weighted to bring them into line with their actual proportions in the population. Because the sample is based on those who agreed to participate, no estimates of sampling error can be calculated.
Results of the survey are for informational purposes only and not intended as investment advice. Investing involves risk. Thus, before investing you should consider what is suitable given your particular circumstances or seek professional advice.
Ally Invest is the brokerage and wealth management offering from Ally that exists alongside the firm's award-winning online banking products. Ally Invest offerings consist of a low-cost trading platform for self-directed investors, as well as a suite of affordable, automatically-managed investment portfolios, both delivered through a fully-transparent online process. The combination of low-cost investing with Ally's competitive deposit products gives customers a powerful value proposition for managing their financial well-being.
For more information about the survey results, contact Sue Parente, firstname.lastname@example.org.
About Ally Financial Inc.
Ally Financial Inc. (NYSE: ALLY) is a leading digital financial services company with assets of $171.3 billion as of June 30, 2018. As a client-centric company with passionate customer service and innovative financial solutions, Ally is relentlessly focused on "Doing it Right" and being a trusted financial partner for its consumer, commercial, and corporate customers. Ally's award-winning online bank (Ally Bank, Member FDIC and Equal Housing Lender) offers mortgage-lending services and a variety of deposit and other banking products, including CDs, online savings, money market and checking accounts, and IRA products. Ally also promotes the Ally CashBack Credit Card. Additionally, Ally offers securities brokerage and investment advisory services through Ally Invest. Ally remains one of the largest full-service auto finance operations in the country with a complementary auto-focused insurance business, which together serve approximately 18,000 dealer customers and millions of auto consumers. Ally's robust corporate finance business offers capital for equity sponsors and middle-market companies.
For more information and disclosures about Ally, visit https://www.ally.com/#disclosures
Andrea Puchalsky of Ally
Sue Parente at Tier One Partners