Retail Investor Survey 2024

Investors seek safety in a year of unknowns

Sound financial advice leaves investors on firmer footing

Introduction

For the past 18 months, investors, public officials, and the media have been debating the likelihood of a U.S. economic recession that has yet to materialize.

Despite an overall healthy economy, major issues confront retail investors. Interest rates are at a 23-year high, and inflation remains a persistent concern as the cost of daily expenses hit consumers' wallets, compounded further by this particularly turbulent election year.

We are in a different place than we were a year ago. Global markets are characterized by "cautious optimism" and are generally in a recovery phase following the economic disruptions of the last few years. Opportunities abound for investors to take advantage of this landscape with both investing and savings dollars.

Navigating the current reality is complicated. The mixed messages of economic strength on one side and widespread recession on the other—made all the more complicated by the unknown that is November's election cycle—have left investors searching for answers. We've found that they seek these out in a number of ways.

For one, financial advice and support is in high demand as people grapple with wide-ranging market factors and more ways to invest, save, and spend than ever before. Others have hunted for yield wherever they can find it; and even more investors have turned to friends, family, and social media for advice.

In the face of this uncertainty, we wanted to get a better understanding of investors' current mindsets, investing behaviors, and financial knowledge. We were also curious to measure investor perception around inflation and a shifting interest rate environment, and how investors are feeling about and planning for potential financial repercussions tied to the upcoming 2024 elections.

In the second edition of Betterment's Retail Investor Survey, we surveyed 1,200 U.S. investors across four generations (Gen Z, Millennials, Gen X, and Boomers) to examine current trends and how they have shifted year over year from our 2023 survey.

Betterment surveyed 1,200 U.S. investors across four generations...

(Gen Z, Millennials, Gen X, and Boomers) and various demographics to examine their current mindset, investing behaviors, and expectations for the future, as well as how they receive their financial information.

Interest rates dominate

Investors are paying close attention to rates. Whether they hold steady or drop, investors remain focused on maintaining and increasing their high-yield savings and cash holdings.

Investors approach the election with apprehension

Whether this holds true as the election nears remains to be seen, but investors across the board are planning to take a step back from markets ahead of expected political and economic turbulence.

"Fin-fluencers" continue to inspire

Use of social media for financial advice has increased, with more than a third of respondents having taken tips from an online influencer over the past year; however, it's not always worked out well for them.

Emergency funds have taken a hit

In the face of numerous market and personal pressures, fewer investors reported having emergency funds compared to last year. The majority have less than six months of expenses saved up, with a number of respondents having tapped into these funds over the past 12 months.

Personal optimism prevails

While the high cost of living has been the single biggest challenge facing investors this past year, and inflation, interest rates, and elections are on their minds, they're largely positive about the state of their personal finances.

Section 01

The uncertain direction of interest rates drives the hunt for yield

Investors entered 2024 expecting the Federal Reserve to cut interest rates.

However, with inflation still above target levels, these cuts have yet to materialize.

As a result, interest rates continue to dominate headlines, and investors are tracking them closely, anxiously awaiting the Fed's next move—more than three quarters of investors (78%) said they pay attention to rates. This number particularly jumps among groups with financial advisors, higher incomes, and a positive financial outlook.

So what does this mean for investors and their money? The past 12 months have seen a surge in the "hunt for yield," as investors have seemingly aimed to capture as much interest as they can before rates come down.

Amid these concerns of falling rates, investors have maintained or increased high-yield savings and cash holdings, indicating a desire for liquidity and possibly that investors are looking for a hedge against uncertainty.

As noted, investors are seeking yield wherever they can. Over the past year, 52% have moved their money once or multiple times to new providers, or opened new accounts with their existing provider in search of higher yield.

Who's most engaged on interest rates?

• 88% of investors with a financial advisor
• 86% of investors making $100K+
• 85% of investors with a positive financial outlook
• 84% of Millennials

If rates fall, investors plan to prioritize:

• Earning more income: 47%
• Reducing spending: 46%
• Beating inflation: 41%

Who's chasing yield?

Generation

• Gen Z: 39%
• Millennials: 45%
• Gen X: 23%
• Boomers: 20%

Financial outlooks

• Positive: 60%
• Neutral: 39%
• Negative: 38%

Financial advisor

• Investors with a financial advisor: 70%
• Investors without a financial advisor: 37%

Income

• Over $100K: 68%
• $50–$99K: 52%
• Under $50K: 42%

Interest Rate Impact (continued)

Beyond cash holdings, nearly a third (32%) of investors have changed the type of investments they have made in the past 12 months because of interest rates.

According to investors, high interest rates have caused them to:

• Increase savings to high-yield accounts: 50%
• Increase cash holdings: 42%
• Increase crypto holdings: 30%
• Invest in crypto for the first time: 10%

While investors might more easily swap between different products or add accounts at their current banks, nearly two-thirds of investors said it would take an interest rate of at least 5% to incentivize them to switch their savings account to a new banking provider. Thirteen percent said no amount would be enough to convince them to switch.

Should rates fall, that doesn't mean that investors are going to pull back on their cash holdings—just 11% say they would decrease their high-yield savings or cash savings, vs. 35% and 41% of investors who would hold steady, respectively, in each category. Twenty-nine percent of investors said they would even continue to increase their holdings to both.

Sixty-one percent of respondents said they are earning 3% or less in interest on their savings account, whereas another 18% weren't even aware of what their current annual percentage yield (APY) was. That increases for a number of groups—nearly a quarter of women (22%) and those without a financial advisor (24%) said they were unsure of what they currently earned in interest on their savings account; 28% of those making less than $50,000 and 28% with a negative outlook on their financial future agreed.

Boomers are earning the best rate. Twenty-six percent earn 4+% APY compared to 22% of Gen X and Millennials. Just 14% of Gen Z said they are earning at least 4% APY.

"High-yield cash and other yield-bearing instruments are critical tools for investors in this environment. We've seen persistent interest in our Cash Reserve product, and investors continue to focus on maximizing yield with rate cuts on the horizon. It will be important for investors to be mindful of their overall cash allocations and ensure they're not losing out on time in the market as they focus on short-term yield. There's a huge opportunity here for advisors and other financial institutions to educate customers on thoughtfully managing their portfolios as macroeconomic conditions shift."

Mike Reust, President at Betterment

A closer look at homebuying

One of the most significant areas that interest rates have affected is housing. After record low rates for years, all prospective homeowners faced the soaring rates of 2023. Nearly a third (31%) of respondents are looking to buy a home, and interest rates are a critical factor, with 72% of those prospective homebuyers indicating that rates have delayed their decision to purchase a home.

81% would not consider buying a home unless mortgage rates were at or below 6%.

What are investors' top three priorities when considering a home purchase?

• Financial preparation: 49%
• Location: 40%
• Interest/mortgage rates: 39%

Which generations are in the market for a home?

• Gen Z: 39%
• Millennials: 45%
• Gen X: 20%
• Boomers: 10%

Despite uncertainty around the elections, interest rates, and who to get information from, investors are still faring relatively well in today's market, and they know it. Almost 70% of respondents are aware of how well their portfolio performed over the past year, and 68% saw positive changes in their overall returns.

"When it comes to homebuying in this market, it's all about affordability. This is something we see time and again with our clients. They think they need to wait until rates come down to buy a house. In reality, it is more important to prepare your finances for any interest rate environment. The mortgage rate is just one piece of the puzzle of homebuying; the overall state of your finances, other milestones in your financial plan, location, and more are just as, if not more, important."

Nick Holeman, CFP®, Director of Financial Planning at Betterment

Section 02

Election uncertainty stalls action

Election years are always marked by uncertainty, but that rings particularly true this year.

Along with the rematch for the White House, investors are keeping a close eye on the narrow majorities in both the Senate and House of Representatives that will also be up for grabs come November.

Election results impact everything from broad economic policies and market moves to day-to-day consumer spending and financial decisions. As we make our way through this election cycle, we were curious to learn more about the impact it's having on investor mindsets and actions.

Investors are dialed into this conversation, with 92% reporting at least a baseline understanding of the upcoming elections and 63% reporting advanced knowledge. But it's weighing heavily on them: 57% of respondents feel anxious or scared about the upcoming elections.

Individuals with portfolios over $1 million were twice as likely to be excited (32%) about the election as those with less than $100,000 (16%).

What word describes how you feel about the upcoming elections? Select all that apply

• Anxious: 35%
• Optimistic: 26%
• Scared: 22%
• Excited: 21%
• Pessimistic: 20%
• Neutral: 20%

How likely are you to move or pull investment funds based on the outcome of the elections?

Likelihood	Regardless of result	If Biden wins	If Trump wins
Very likely	14%	20%	20%
Moderately likely	19%	22%	20%
Moderately unlikely	21%	16%	18%
Very unlikely	32%	29%	28%
Not sure	14%	13%	13%

Election Uncertainty (continued)

When considering the potential impact the upcoming elections could have on their finances, 47% of respondents indicated inflation remaining high was their biggest concern, followed by taxes increasing (44%), the potential for a recession (40%), and a stock market crash (31%).

There weren't meaningful differences in how the average investor would react based on the election outcome, but further insights emerged when digging into different demographics:

• Fifty percent of Republicans say they are very or moderately likely to pull investment funds if Joe Biden wins, whereas 52% of Democrats are very or moderately likely to pull investment funds if Donald Trump wins.
• Over half of Millennials (54%) and Gen Z (56%) say they are likely or very likely to pull their investment funds out if Biden wins, compared to only 25% of Gen X and 26% of Boomers.
• Younger generations and Boomers claim to be just as likely to pull their money if Trump wins compared to Biden, whereas Gen X is significantly more likely to change their investments with a Trump presidency.

How is your mindset about the upcoming elections affecting your financial planning?

Category	Increase	No change	Decrease	Not relevant
Money held in cash/cash accounts (savings, checking)	29%	55%	9%	7%
Money in the stock market—individual stocks	23%	51%	12%	15%
Money in the stock market—ETFs and mutual funds	21%	52%	9%	17%
Timeline for a major purchase like a home	20%	48%	13%	20%
Money held in bonds and treasuries	19%	52%	12%	17%

"Although investors are anxious about the upcoming elections, this anxiety doesn't seem to be translating to significant shifts in their investment approaches. While we can expect the markets to react to the upcoming political cycle, investors aren't planning on letting the coming elections affect their portfolio allocations, long-term investments, and timeline for major financial decisions for the most part. Only time will tell whether this holds true, particularly as the elections get closer in the second half of the year, but it's a good signal that investors aren't planning to react emotionally."

Dan Egan, VP of Behavioral Finance & Investing at Betterment

SECTION 03

Social media's influence grows, but financial advisors remain the most trusted source of guidance

How do investors rate their financial knowledge?

Eighty-five percent of investors said they have at least a baseline understanding of personal finance, but less than half (48%) reported having advanced levels of financial knowledge, hinting at added financial management complexities investors are facing this year.

Looking across demographics, men rated their financial knowledge more highly than women did, and Millennials feel the most knowledgeable among generations. Investors with financial advisors rated their financial knowledge nearly twice as high as those without advisors, showing the impact of these trusted financial counselors.

A strong majority (82%) of investors expressed interest in boosting their financial knowledge. This was most prevalent among Millennials (91%) and individuals in the "dual income, no kids" category (a.k.a. "DINKs") at 89%.

Across demographics, what portion of investors report feeling knowledgeable about their finances?

Gender

• Men: 57%
• Women: 38%

Generations

• Gen-Z: 50%
• Millennials: 57%
• Gen-X: 43%
• Boomers: 40%

Financial Advisors

• With advisor: 66%
• Without advisor: 34%

Knowledge Breakdown (Overall)

• Very knowledgeable: 19%
• Some advanced knowledge: 29%
• Baseline knowledge: 37%
• Limited knowledge: 12%
• No knowledge: 3%

Where is financial knowledge coming from—and is it trustworthy?

Friends and family were cited as the top source where investors get their financial news, followed by online media publications (37%) and television (33%). We observed some distinctions here across gender, with friends and family being the primary source for women, whereas online media was the main source for men.

Where are you primarily getting your financial information?

• Friends and family: 39%
• Online media publications: 37%
• Television: 33%
• Social media and influencers: 31%
• Financial advisor: 29%
• Podcasts: 18%
• Radio: 14%

Who do you trust as your #1 source for financial advice?

• Friends and family: 21%
• Online media publications: 13%
• Television: 10%
• Social media and influencers: 6%
• Financial advisor: 40%
• Podcasts: 7%
• Radio: 4%

Consumer publications were the online media source investors turned to most for financial news (35%), along with personal finance publications (27%), business publications (25%), and newsletters and substacks (9%). This is a departure from 2023, when investors reported business publications as their #1 source of financial news (34%).

However, financial advisors were rated the most trusted source of financial information by far (40%), followed by friends and family (21%), and online media (13%), underscoring the value of personalized, credible, human-led guidance.

Trust in social media as a personal finance source has increased, with 28% of respondents ranking it within their top three most trusted sources, compared to 22% in 2023. Financial advisors remain the most trusted source, but it's clear there has been a rise in social media's influence— particularly among younger demographics and those with higher incomes—as TikTok and online influencers continue to grow in popularity.

How do you plan to increase your financial knowledge?

• Reading more financial and market news: 55%
• Talking to friends or family: 38%
• Hiring a financial advisor: 36%
• Enrolling in financial/investing literacy classes: 30%
• Utilizing existing financial wellness education offerings from an employer: 26%
• Finding an influencer/online personality I trust: 23%

Have you taken financial advice from social media/influencers?

• Yes: 39%
• No: 61%

More than a third (39%, the same percentage we saw in 2023) of investors have acted on financial advice from social media influencers, with Gen Z and Millennials; DINKs; higher income earners; and, interestingly, those with financial advisors being more likely to take their advice.

However, fewer people said the advice they received worked out well for them in 2024 (76%) compared to 2023 (87%) — and just 35% reported that it worked out "very well" for them this year, a 17 percentage point dip from last year.

Of those who said yes, this includes:

• 42% of men vs. 35% of women
• 61% of Gen Z and 55% of Millennials vs. just 27% of Gen X and 9% of Boomers
• 52% of those who make over $100K, vs. just 39% of those who make $50K-$100K and 29% of those who make less than $50K
• 53% of investors with an advisor, vs. just 28% of those without

How did you fare after following financial advice from social media?

• It worked out very well: 35%
• It worked out somewhat well: 41%
• It had no real impact: 18%
• It worked out somewhat badly: 4%
• It worked out very badly: 2%

Through which platforms have you taken financial advice?

• YouTube: 61%
• Instagram: 47%
• Facebook: 47%
• TikTok: 45%
• X: 32%
• LinkedIn: 24%
• Reddit: 20%
• Threads: 15%

"While platforms like Reddit, TikTok, and ChatGPT can offer a wealth of information and perspectives... they lack the personalized touch and accountability that comes with working with an advisor. The advice you learn from online influencers or generative AI tools does not take into account the intricacies of your personal financial situation, including how various factors such as income, debt, and expenses will change over the course of your life. Although these platforms can offer a 'quick fix' to consumers looking for entry-level guidance, the value of face-to-face interactions, tailored advice, and the assurance of professional accreditation and fiduciary responsibility create a foundation of reliability and confidence that online forums simply can't replicate."

Dan Egan, VP of Behavioral Finance & Investing at Betterment

Financial advisors making their mark

What role do financial advisors—both digital and human—play with investors and the state of their finances? In short: a big one. As we've seen so far, advisors have a clear impact on how much investors know about finances. Investors with advisors also report higher levels of confidence, better financial performance, and more.

Do you currently work with a financial advisor?

• Yes: 42%
• No: 58%

When did you hire your financial advisor?

• Less than six months ago: 13%
• Within the past 6–12 months: 21%
• 1–2 years ago: 29%
• 3–4 years ago: 12%
• 5 years ago: 25%

Investors with financial advisors (42% of respondents) report more positive financial outlooks

This includes stronger confidence in their financial situations and engagement with their finances as well as better investment performance and a greater likelihood of having an emergency fund.

How do investors without advisors fare financially, compared to investors with advisors?

Metric	Without Advisor	With Advisor
Have a positive financial outlook	48%	76%
Know how their portfolio performed over the past year	51%	90%
Report that their portfolio went up over the past year	56%	77%
Have an emergency fund	56%	88%

Seventy percent of overall respondents said they knew how their portfolios performed over the past year. However, investors with financial advisors reported significantly greater levels of awareness of their financial performance—nearly two times higher than their counterparts without advisors.

Fast facts

• Millennials are the "most advised" generation (52%), and Gen X is the least (30%).
• Over half of Gen Z and Millennials see the benefit of an advisor (56% and 54% respectively). Boomers are both the least likely (17%) to think they would benefit from an advisor and the most confused about the advantage, with 44% unsure if they'd benefit.
• 50% of those with an advisor hired them between six months and two years ago, indicating interest in advisors has risen recently. A quarter (25%) have had an advisor for more than five years.
• Women are both less likely to have an advisor (39% vs. 46% of men) and less likely to think they would benefit from one (39% vs. 45% of men).

How do you think you'd benefit from a financial advisor?*

• Improve my financial plan/budget: 60%
• Reduce my stress about finances: 54%
• Advance my long-term savings goals: 49%
• Improve my investment portfolio: 44%
• Educate me on new investment vehicles: 36%
• Improve my tax situation: 34%
• Navigate high interest rate environment: 22%

For those without an advisor, 42% think they would benefit from having one. However, another 32% aren't sure if they would benefit, indicating a big opportunity for education. When asked why they didn't think they'd benefit, "My finances are simple" (43%), "Financial advisors are too expensive" (40%), and "I like managing my finances myself" (30%) were the top reasons cited.

"It's great to see the clear benefits that financial advisors are having on investors. This includes investors being more attuned to their financial situation, to having greater overall confidence in their finances. While an advisor's job is first and foremost to tell you the best way to manage your money, they can also serve as a great support system to help instill greater confidence..."

Tom Moore, Senior Director of Betterment for Advisors

SECTION 04

Investors are confident, despite concerns surrounding inflation, the elections, and debt

Despite a challenging financial environment and uncertain road ahead, investors are surprisingly confident about their individual financial situations.

Sixty percent report feeling positive about their financial future, and 55% said their outlook has gotten more positive over the past six months.

Financial confidence was notably higher among the 42% of investors with financial advisors—this group ranked their financial positivity levels at 76%, compared to 48% for those without an advisor. This number also increases among younger generations, with 70% of both Gen Z and Millennials reporting positivity, compared to just 47% of Boomers and 52% of Gen X—a notable distinction given that younger generations tend to be less financially settled than older generations. Additionally, men reported feeling more positive than women (66% vs. 54%).

How has your personal financial outlook changed over the past six months?

• Much more positive: 21%
• Somewhat more positive: 34%
• No change: 26%
• Somewhat more negative: 15%
• Much more negative: 4%

Top sources of financial stress this year:

• Inflation: 38%
• The 2024 election: 27%
• Paying off debt: 26%
• Covering household costs/bills: 21%
• Becoming unemployed and/or finding a job: 21%

Inflation was the top concern for all respondents, followed by the election and paying off debt. Just 20% of investors cited their ability to retire as a primary stressor, whereas only 15% said rising interest rates and 13% said market volatility or a potential recession were areas of top concern, despite these topics dominating media headlines over the past year.

Looking across generations, investors' top financial concerns remained largely consistent, with some slight differences. Paying off debt was a primary concern for every generation aside from Boomers, who may not be facing as much debt at a later stage in their lives.

Meanwhile, Millennials were the only generation who did not report the 2024 elections as a top three financial concern, despite this generation reporting that they would be likely to pull money out of their investments based on the winner of the elections.

How do top financial concerns differ by generations?

Gen Z

• Inflation: 37%
• Paying off debt: 25%
• 2024 election: 23%

Millennials

• Inflation: 34%
• Paying off debt: 29%
• Ability to retire: 24%

Gen X

• Inflation: 34%
• 2024 election: 29%
• Paying off debt: 27%

Boomers

• Inflation: 45%
• 2024 election: 31%
• Becoming unemployed/finding a job: 25%

Additional observations

• Democrats are more worried about the election than Republicans (33% vs. 23% ranked as their #1 concern).
• Republicans are most worried about inflation (43%) and falling interest rates (26%) compared to Democrats, who are most concerned about the 2024 election (33%) followed by inflation (31%).
• Higher income individuals are also more concerned about the election (32%), compared to just 21% of investors overall.

A closer look at inflation and costs of living

Investors are feeling the effects of inflation. The cost of everyday items was by far the #1 challenge to building wealth (reported by 67% of investors), which holds true across all demographics (including gender, generation, income level, and political affiliation).

Needing to reduce spending was cited more this year, with 46% reporting it as a top priority compared to 35% in 2023. Notably, when asked about their priorities if interest rates fall, these priorities did not shift.

Aside from ensuring they can cover their basic financial needs, respondents' top five financial priorities for the next 12 months are:

• Reducing spend: 46%
• Earning more income: 44%
• Paying down debt: 39%
• Beating inflation: 37%
• Saving for retirement: 33%

"It's interesting that Millennials were the only age group that didn't rank the election within their top three financial concerns for the year. Instead, this cohort is most worried about debt repayment and their ability to retire, in addition to inflation. The data echoes similar findings in our 2023 Retirement Readiness Report, which found that inflation was the single biggest financial impediment for workers during the prior 12 months, as high costs of living disrupted bigger financial plans such as saving for retirement and paying down debt..."

Nick Holeman, CFP®, Director of Financial Planning at Betterment

SECTION 05

Positivity in investor performance and retirement readiness, but emergency funds take a hit

Section 5: Investing Performance

68% of investors have seen their portfolios go up in the last year.

Despite uncertainty around the elections, interest rates, and who to get information from, investors are still faring relatively well in today's market, and they know it. Almost 70% of respondents are aware of how well their portfolio performed over the past year, and 68% saw positive changes in their overall returns.

However, the number of respondents with an emergency fund dropped nearly 10 percentage points year over year (78% to 70%). Younger generations are beating the average, with 73% of Gen Z and 74% of Millennials having emergency funds, compared to 71% of Boomers and 61% of Gen X.

The most common reason for not having an emergency fund is a perceived lack of sufficient funds to start one (64%). Interestingly, this concern is most pronounced among Boomers (73%) and decreases with younger generations, with Gen Z at 57%. Understandably, it's also the most prevalent concern among lower-income earners (75% of those earning less than $50,000 a year) and trends downwards as income goes up, but notably 36% of investors making over $100,000 a year also felt they didn't make enough to start an emergency fund.

Of those who saw their portfolios grow, this includes:

Financial advisors

• Investors with a financial advisor: 77%
• Investors without a financial advisor: 56%

Gender

• Men: 75%
• Women: 60%

Generation

• Gen Z: 65%
• Millennials: 79%
• Gen X: 65%
• Boomers: 64%

Do you have an emergency fund?

• Yes: 70%
• No: 30%

How big is your emergency fund?

• 1–2 months' worth of expenses: 18%
• 3–5 months' worth of expenses: 32%
• 6 months' worth of expenses: 22%
• More than 6 months' worth of expenses: 24%
• Not sure: 3%

Why don't you have an emergency fund?

• 64% — I don't have enough money to start one
• 27% — I had one but needed to use it for emergency expenses
• 12% — I don't feel like I need one
• 10% — I don't know how to start one
• 6% — My partner has one

36% of investors who make over $100,000 a year report that they don't feel they have enough money to start an emergency fund.

Moreso, a significant amount (40%) of investors have tapped their emergency fund in the past 12 months. Over half of Gen Z (53%) and Millennials (50%) tapped their funds, compared to just 31% of Gen X and 22% of Boomers.

Emergency fund status update

Why have 40% of investors tapped their emergency funds?

• Paying rent or bills: 35%
• Medical expenses: 29%
• Home repairs or car repairs: 28%
• Unexpected emergency: 25%
• Paying for living expenses while temporarily unemployed: 23%
• Supporting a friend or relative financially: 22%
• Vacation: 21%
• School or other education/training: 20%
• Paying down student loan debt: 19%
• A milestone purchase: 18%
• College expenses: 17%
• Nonessential purchases like a new phone, clothes, or furniture: 13%

There's good news though…

Nearly all of those who have dipped into their funds have also started to rebuild it (87%), indicating that personal financial situations have largely stabilized or improved in the past 12 months.

"It's noteworthy that a full 40% of investors have tapped their emergency funds in the last year. However, if you look at the top six reasons that investors dipped into their funds, it's all for necessary expenses and where we would expect to see emergency funds being used. So while the 40% number illustrates the volatility that consumers have needed to navigate over the last year, it's reassuring that consumers are using emergency funds correctly. That combined with nearly all respondents who have tapped their fund having already started to rebuild it is reassuring and reflects a conscious effort to maintain financial resilience. Having a cushion of funds for unforeseen expenses is critical to maintain financial stability, so rebuilding that fund should be top priority for any households that have needed to tap them."

Nick Holeman, CFP® Director of Financial Planning at Betterment

Section 5: Investing Performance

When it comes to retirement, a slight majority (53%) of investors believe they are on track with their retirement savings, a sentiment more common among men (61%) than women (46%).

Notably, 16% of those making under $50,000 were unsure whether they were on track for retirement, compared to just 4% of investors in both other income categories ($50,000–$100,000 and over $100,000).

A third (34%) of respondents have changed their retirement planning approach in the past year—encouragingly, the top change (made by 37% of investors) was increasing contributions. People with financial advisors were almost twice as likely to have made changes to their approach (43%) compared to those without advisors (24%), suggesting again that having an advisor can empower investors to be more proactive with retirement planning.

People with a financial advisor have significantly increased confidence—74% of investors with advisors feel on track, vs. just 39% of those without. Confidence correlates with income as well, with higher earners feeling more secure (72%) compared to 59% of those making between $50,000 and $100,000, and only 35% of those making less than $50,000.

How have you changed your approach to retirement planning?

• 37% — I've started contributing more to my retirement account
• 34% — I've started a new retirement account type (401(k), IRA, etc.)
• 32% — I've increased risk of my portfolio
• 28% — I moved jobs recently and began to contribute to my employer's 401(k)
• 28% — I've switched retirement account providers
• 27% — I've started contributing less to my retirement account

CONCLUSION

Markets may be largely recovering, but investors are still facing a myriad of old and new considerations when it comes to their finances

In the face of this complexity, we're seeing broad concern from investors for future events that may shift markets and their finances and conversely, strong personal confidence in their own financial situations as they generally do quite well in staying the course with their investments. Similar to what we saw last year, investors are feeling good overall, seeing positive returns in their portfolios, prioritizing financial literacy, and choosing to capture yield while rates are high.

That said, emergency preparedness has taken a hit, there are notable concerns about what is in store for interest rates and the elections, and some investors are feeling unsure about their retirement preparedness.

For these reasons, it is reassuring to see that financial advisors emerged as a strong asset for investors over the past year and one that investors are increasingly turning to in the face of today's complex environment. Beyond higher returns, advisors are having a positive impact on mindset and outlooks, financial knowledge, and better long-term preparedness.

However, there's still work to be done with many investors unsure of the benefits of advisors or their ability to afford one, demonstrating a significant opportunity for advisors to increase education and outreach.

In next year's survey, we'll be tracking trends in these areas, as well as closely following areas such as retirement and emergency preparedness (which we also track in our yearly retirement readiness survey), financial wellness, and overall long-term saving and investing mindsets. We'll be able to see how concerns about the election shake out and check in on how concerns and reactions to interest rates develop over the next year.

Each year, we'll review and analyze pressing financial trends affecting investors to dig deeper on the real-world impact of cyclical market patterns and economic conditions on shifting investor priorities and saving habits. As they do, it will be important for investors to not let short-term volatility affect their long-term goals and saving priorities.

To get started on investing for your goals with Betterment, follow the link here.

METHODOLOGY

An online survey commissioned by Betterment was presented to a group of potential respondents. A total of 1,200 respondents completed the survey between March 27 and April 3, 2024, which was conducted by Sago Group, an independent research company.

The survey collected a representative sample of U.S. respondents who hold investments beyond solely a 401(k) and was split evenly (300 per group) between the four major generation groups (Boomers, Gen X, Millennials, Gen Z). All were invited to take the survey via an email invitation. Panel respondents were incentivized to participate via the panel's established points program.

Findings and analysis are presented for informational purposes only and are not intended to be investment advice, nor is this indicative of client sentiment or experience.

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