The Ameriprise Financial study, Financial Priorities, explores how the pandemic has prompted investors to reexamine what’s most important in their financial lives and the long-lasting changes they’ve made in light of their adjusted priorities.
Shifting financial priorities
Over 60% of respondents said the pandemic has heightened the importance they place on protecting their assets and preparing for financial uncertainty. And many believe they’ll continue to be cautious going forward.
- Protecting financial assets: 63% of respondents said protecting financial assets is more important now and 45% said this will be of long-lasting importance
- Preparing for uncertainty: 62% said financially preparing for uncertainty is more important now and 47% said this will be of long-lasting importance
- Growing savings: 58% said growing savings is more important now and 44% said this will be of long-lasting importance
- Increasing investments: 46% said increasing investments is more important now and 40% said this will be of long-lasting importance
The findings from Ameriprise’s study reveal how the pandemic has shifted these priorities for investors.
While other priorities have shifted, one has remained high on the list for most survey participants: preparing for retirement.
Continuing to prioritize saving for their future is paying off for investors. Despite the challenges of the past year, over two-thirds of respondents’ retirement goals are on track.
The pandemic’s impact on when respondents plan to retire:
- 69% said it did not change their plans
- 18% said the pandemic has accelerated their plans for retirement – they did this sooner than originally expected or plan to
- Among those who retired early than originally planned – 83% said this was voluntary
- On the flip side, 13% said the pandemic delayed their plans
Takeaway: Developing a financial plan that includes strategies to protect their assets and accounts for the unexpected can help investors navigate today’s challenges, while staying focused on tomorrow’s goals.
Shoring up their finances
The pandemic has heightened investors’ engagement in their financial lives and prompted many to take actions that they may have otherwise put off.
Of the respondents who did not have the following in place prior to the pandemic:
Since the start of the pandemic, some investors are having more money discussions with relatives, including:
- 30% of respondents with children increased the frequency of financial discussions with them
- For those with a spouse or partner 24% increased discussions about short-term financial issues and 25% increased discussions with their spouse/partner about long-term investments
- 23% of respondents with siblings are discussing personal finances more – either theirs, their siblings’, or their parents’ finances
Takeaway: Taking important steps such as estate planning or having money conversations with family members can help investors bolster their financial confidence.
Spending, saving and investing
Nearly half (45%) of respondents reduced their spending during the pandemic and – and 30% of them expect to remain more thrifty with their money in the future.
On the other end of the spectrum are investors who feel a pent-up urge to spend.
Investors seek professional guidance
Among respondents who have a financial advisor:
- Seven out of 10 said working with a financial advisor increased their confidence during the pandemic
- 83% said the pandemic confirmed the importance of working with a financial advisor
Even 4 in 10 respondents who don’t have a financial advisor believe advisors help withstand unexpected financial changes.
Takeaway: A financial professional can play an important role in helping investors assess the long-term impact of their shifting priorities.