More than half of San Diego adults feel they are in good shape on immediate financial needs, but that sentiment declines when it comes to longer-term goals, according to Wells Fargo’s Financial Health Survey.
“I think it’s something so far on the horizon that for most people it’s difficult,” said Marc Doss, regional chief investment officer for Wells Fargo Private Bank.
About 58 percent of local respondents reported that they are living within their means and don’t need to worry about money, but only 40 percent reported feeling in good or great financial shape to retire comfortably.
“I think people know they need a plan, but actually taking that step to have a plan is sometimes difficult,” Doss said.
The findings are based on an online survey conducted between Nov. 13 and Nov. 30 among 1,004 adults (age 25 to 75) nationwide and 300 in San Diego County.
Doss said people need advice now more than ever. There are many day-to-day numbers that are short-term focused -- like the stock market -- while financial objectives are in years and decades.
“The planning part is what helps cut through all of that. You have to take the time. It takes time to share all of that information with an adviser. It takes time and you have to open up -- that’s not always easy,” Doss said.
About 47 percent of local respondents reported having no type of detailed investment or financial plan, or a budget to help manage spending. And 45 percent of residents recognize they would benefit from a professional financial or investment adviser.
A good adviser will take the time to understand the financial goals and create a plan, Doss said. A good adviser also has the difficult discussions with their clients to help achieve those goals. Individuals have to think about longevity, with one-third of people born today expected to live to 100, Doss said.
“I don’t think people understand how much money they actually have to save to be able to retire. It’s a much higher number than people realize,” Doss said.
Most people only have 401(k)s and don’t have a regular pension, and the average 401(k) is about $100,000. People with investments in 401(k)s were “burned” during the financial crisis and, because of that, might not be saving as much as they should.
Barriers keeping people from saving more are knowing the best way to save or invest and sticking to a savings plan over time, according to the survey.
Nearly half (48 percent) of local adults describe their household’s overall financial health as “good” or “great,” and the remaining 52 percent describe their financial health as “poor” or “average.”
Doss said people are feeling better about financial assets mostly due to a “big recovery” in the housing market. Doss expects housing to continue to recover but not as rapidly as it did in the initial stages.
“The biggest factor that affects somebody’s psychology about their net worth is their home. It’s their biggest asset,” Doss said.
San Diego residents reported feeling more confident in the housing market than adults nationwide. About 49 percent feel the housing market is in “good/great” shape, compared to 36 percent nationally, and 69 percent of local respondents see improvements in the local housing market, compared to 64 percent nationwide.
The news is generally good with home prices rebounding and the job market has improved with unemployment levels coming down from high levels, Doss said. But people don’t feel completely secure in their jobs and the economy “still feels fragile,” he added.
While an improving housing market has many positive effects, it’s San Diego’s housing that has a greater impact on residents than those in other areas.
“The challenge in San Diego is that people do spend an awful lot of total net worth and monthly wages on housing,” Doss said.
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Jan. 13, 2015 -- George Chamberlin sits down with John Manley, chief equity strategist for Wells Fargo Funds Management, and James Kochan, chief fixed income strategist for Wells Fargo, to discuss how the stock market, interest rates and other financial matters fared in 2014.
July 30, 2014 -- George Chamberlin and Tom Wornham, chairman of the San Diego County Water Authority, discuss the drought and water restrictions.
June 17, 2013 -- George Chamberlin speaks with Steven Bernstein, senior vice president of the greater San Diego area for Wells Fargo Bank, about how the economy has improved and lending has picked up.