Merrill Edge® Report Finds Nearly 9 in 10 Americans Believe How They Manage Their Money Would Make Their Parents Proud

Bank of America today announced findings from the latest Merrill
Edge® Report, which reveals people are feeling simultaneously
optimistic and overwhelmed by their finances. Merrill is committed to
empowering clients and helping them plan for the future at every age and
in every stage of their financial lives through a combination of tools,
people and know-how across Merrill
Edge Self-Directed, Merrill
Guided Investing, and Merrill Lynch
Wealth Management.

The report is a biannual study of more than 1,000 mass affluent¹
Americans’ evolving financial concerns and priorities. It found that 85
percent believe how they manage their finances today would make their
parents proud. This may be thanks to savvier spending habits and the
fact that 85 percent of Americans improved their financial lives in
meaningful ways in the last year:

• Forty-five percent worked at improving their credit score, 43 percent
  worked toward paying off some or all of their credit card debt, and 35
  percent established an emergency fund by setting enough aside to live
  on for three months without an income.
• Far fewer people are paying only the minimum balance on their credit
  card (17 percent), spending more than half of their paycheck on a
  single purchase (14 percent), or dipping into their retirement savings
  (11 percent).
• For parents, 81 percent would like to leave an inheritance to their
  children, and many (38 percent) are making sacrifices to their
  lifestyle today to do so, including cutting back on dining out and
  entertainment (31 percent) and reducing their travel and vacations (26
  percent). Others are even delaying retirement (18 percent), taking on
  a second job or working longer hours (15 percent) in order to do so.
• These positive steps may be leading to a higher level of confidence
  about one’s financial future. Gen Zers and millennials – 44 percent
  and 48 percent – believe they’ll be millionaires one day, and the
  majority of Americans across generations are confident in their
  ability to retire when they want (80 percent), leave money behind for
  their children (80 percent), pay off student loan debt (77 percent),
  and even buy a second or vacation home (57 percent).
• Many are also putting their money where their mouth is, with 42
  percent willing to spend more at a retailer whose values align with
  their own, and 40 percent would stop buying products from companies
  whose values fundamentally conflict with theirs.
• And for all this great work, Americans feel they deserve a treat –
  upon reaching a financial goal, 56 percent like to reward themselves,
  including 71 percent of Gen Zers, 66 percent of millennials, 42
  percent of Gen Xers, and 43 percent of baby boomers. The most popular
  rewards across all age groups include material purchases such as
  clothing, shoes or jewelry (48 percent); taking a vacation (48
  percent); eating at a nice restaurant (40 percent); and indulging in
  spa/beauty treatments (24 percent).

Mind, body, and toll
While Americans are becoming more
conscientious about money and mindful of their spending, many report
that their financial life weighs heavily on their minds, affecting both
their mental (59 percent) and physical (56 percent) health – even more
so among today’s younger generations and women of all ages:

• Gen Z: mental health – 73 percent, physical health – 69 percent
• Millennials: mental health – 69 percent, physical health – 66 percent
• Gen X: mental health – 58 percent, physical health – 54 percent
• Baby boomers: mental health – 40 percent, physical health – 38 percent
• Women: mental health – 64 percent, physical health – 60 percent
• Men: mental health – 52 percent, physical health – 51 percent

The study found that 51 percent are worried about their finances over
the next five years, with top concerns including the potential for an
inadequate amount of savings (55 percent), political instability (53
percent), a looming recession (47 percent), and market volatility (45
percent). Another source of worry – debt (39 percent):

• Excluding their mortgages, 73 percent of respondents are carrying some
  form of debt. The types of debt respondents are dealing with the most
  include credit cards (43 percent), auto loans (36 percent), student
  loans (20 percent), and personal loans (15 percent).
• Forty-six percent of respondents with debt owe more than $20,000,
  while 18 percent owe $50,000 or more.
• In order to pay off debt, 68 percent of respondents are putting
  certain activities and milestones on the back burner, including going
  on vacation (43 percent), buying a car (37 percent), buying a home (30
  percent) and having children (19 percent).

“On the bright side, Americans are prioritizing their financial goals,
and taking steps towards improving their futures,” said Aron Levine,
head of Consumer Banking and Investments for Bank of America. “However,
many find managing their money today causes them a great deal of stress.
The key is to find the right balance of short- and long-term planning,
and always to take steps forward without placing a heavy burden on one’s
current financial situation or well-being.”

Hypothetically, if given the choice to never have to manage their
personal finances again, Americans would rather:

• Give up all social media platforms forever (41 percent).
• Cut carbs, sugar and/or alcohol from their life (37 percent).
• Lose access to their smartphone for a month (35 percent).
• Run into their ex every time they’re out with their current partner
  (25 percent).
• Move back in with their parents (25 percent).

Help wanted
Perhaps the need to tackle debt and overcome the
stress from their finances are why 55 percent of respondents are
currently turning to professional financial guidance, either in person
or online, and why two-thirds plan to do so in the future. A growing
number are also embracing new technology and financial apps to help save
and manage their money, including consumer banking apps (71 percent),
money transfer apps (65 percent), personal finance apps (63 percent),
and automated investment apps (57 percent).

You can’t take it with you – they hope
Meanwhile, in the
midst of the largest generational wealth transfer in history, many
Americans (39 percent) expect to inherit or already have inherited all
or part of their family’s estate, including cash (68 percent), personal
property (57 percent), real estate (53 percent), and securities (41
percent). In fact, 58 percent of Americans believe their financial
stability and lifestyle would benefit significantly or only be made
possible by an inheritance from their family.

The good news is 92 percent plan to leave money and other assets behind,
mainly to their children (59 percent), spouse/partner (54 percent),
siblings (17 percent), and nonprofit organizations (17 percent).
However, that doesn’t necessarily mean they have a plan in place to do
so.

• Sixty-four percent of Americans have not consulted with a financial
  professional about their estate planning, including 46 percent of
  seniors and 59 percent of baby boomers.
• One in three parents favor an early inheritance and would rather
  transfer wealth to their children now, instead of waiting until they
  are gone.

“Creating a long-term financial plan with reasonable, achievable goals
along the way is important,” said David Poole, Consumer Investments
Solutions and Client Services executive at Bank of America. “This can
help Americans find a balance between living the lifestyle they want
now, while working toward major milestones and leaving a legacy for
their children.”

For more in-depth information about the financial behaviors and
priorities of mass affluent Americans, read the entire spring
2019 Merrill Edge Report. A complementing infographic is available here.

¹ Merrill Edge Survey Methodology

Concentrix (an independent market research company) conducted a
nationally representative, panel-sample online survey on behalf of
Merrill Edge April 17-May 9, 2019. The survey consisted of 1,000 mass
affluent respondents throughout the U.S. Respondents in the study were
defined as aged 18 to 23 (Gen Z) with investable assets between $50,000
and $250,000 or those aged 18 to 23 who have investable assets between
$20,000 and $50,000 with an annual income of at least $50,000; or aged
24-plus with investable assets between $50,000 and $250,000. For this
purpose, investable assets consist of the value of all cash, savings,
mutual funds, CDs, IRAs, stocks, bonds and all other types of
investments such as a 401(k), 403(B), and Roth IRA, but excluding
primary home and other real estate investments. We conducted an
oversampling of 300 mass affluents in Atlanta. The margin of error is
+/- 3.1 percent for the national sample and about +/- 5.6 percent for
the oversample market, reported at a 95 percent confidence level.

Bank of America
Bank of America is one of the world’s leading
financial institutions, serving individual consumers, small and
middle-market businesses and large corporations with a full range of
banking, investing, asset management and other financial and risk
management products and services. The company provides unmatched
convenience in the United States, serving approximately 66 million
consumer and small business clients with approximately 4,400 retail
financial centers, including approximately 1,800 lending centers, 2,200
financial centers with a Consumer Investment Financial Solutions
Advisor, and 1,500 business centers; approximately 16,400 ATMs; and
award-winning digital banking with more than 37 million active users,
including over 27 million mobile users. Bank of America is a global
leader in wealth management, corporate and investment banking and
trading across a broad range of asset classes, serving corporations,
governments, institutions and individuals around the world. Bank of
America offers industry-leading support to approximately 3 million small
business owners through a suite of innovative, easy-to-use online
products and services. The company serves clients through operations
across the United States, its territories and approximately 35
countries. Bank of America Corporation stock (NYSE: BAC) is listed on
the New York Stock Exchange.

For more Bank of America news, including dividend announcements and
other important information, visit the Bank
of America newsroom. Click here to
register for news email alerts.

www.bankofamerica.com

Merrill, its affiliates, and financial advisors do not provide legal,
tax, or accounting advice. You should consult your legal and/or tax
advisors before making any financial decisions.

Banking products are provided by Bank of America, N.A., and affiliated
banks, Members FDIC and wholly owned subsidiaries of Bank of America
Corporation.

Merrill Lynch, Pierce, Fenner & Smith Incorporated (also referred to as
“MLPF&S” or “Merrill”) makes available certain investment products
sponsored, managed, distributed or provided by companies that are
affiliates of Bank of America Corporation (“BofA Corp.”). MLPF&S is a
registered broker-dealer, Member SIPC and a wholly owned subsidiary of
BofA Corp.

© 2019 Bank of America Corporation. All rights reserved.

View source version on businesswire.com: https://www.businesswire.com/news/home/20190614005043/en/