Retirees vs. the Working Mass Affluent

In the following interview, Linda Shelby, a Merrill Edge executive, sits down with Brendan Byrnes to discuss the most recent Bank of America (NYSE: BAC) Merrill Edge Report. The report is a semiannual study that puts the behaviors or mass affluent consumers into perspective. With their numbers at nearly 28 million households in the United States alone, understanding the sort of massive trends that affect these individuals can have powerful implications on your investments. Understanding paradigm shifts such as those discussed here are a cornerstone of Motley Fool wuperinvestor David Gardner’s own investing strategy and are critical to his market thrashing returns. Learn more about how he discovers his winners -- just click here now to read more.

Brendan Byrnes: What do we see about the differences between retirees and what you call the “working mass affluent,” as far as their finances go? What’s the difference there?

Linda Shelby: One difference, again, is in optimism. The retirees are finding that they feel more comfortable about their ability to have enough funds to last their lifetime, to continue the lifestyle the way that they want to live it.

They’re feeling more confident about those areas, where the people who are nearing retirement aren’t feeling that way yet. Interestingly, 60% are still counting on using public programs to help aid their retirement, such as Social Security and Medicare. Even more interestingly, people who are 20 years away from retirement are still counting on that at a rate of about 70%.

Even knowing what we know about Medicare/Social Security, they’re still counting on that as something that’s going to help them through.


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