At Ally Invest, there’s not much we love more than getting together and talking about all things saving, investing and planning for retirement. Combine that with the fact that only about half of U.S. adults have some form of retirement plan in place and you’ll see why, on February 24, we brought in experts from across the financial industry for our Elevate Your Financial Future Digital Conference. We discussed the mental barriers and breakthroughs that influence retirement plans, opportunities for building wealth during your golden years and societal developments that shaped the way we invested in recent months — and so much more.
We covered a lot in just a few hours, spanning topics like crazy search trends (you might be surprised how many folks researched “bidets” in 2020) and the bonuses and drawbacks of FIRE (Financially Independent Retire Early) strategies. And throughout the Elevate Your Financial Future conference, there were plenty of laughs, lessons learned and lively debates.
If you couldn’t tune in live or want to re-watch any of the sessions, you can stream the full event on demand on our conference website. And now, read on for three of the top lessons from the day that stuck with me.
1. Saving is scientific.
You know you’re supposed to save. And you’ve probably been told about the importance of investing for retirement. Yet, millions of people still struggle to put it into practice. Lule Demmissie, during her tenure as president of Ally Invest, and Dr. Vicki Bogan, founder and director of Cornell’s Institute for Behavioral and Household Finance, sat down to discuss why that is — and how a large part of it comes down to behavioral science.
Research has found four of the biggest mental barriers to saving for future are:
- Hyperbolic discounting: Caring more about present wants than future benefits when thinking about money.
- Status quo bias: Sticking to doing things exactly as you already do them due to ease (i.e., not periodically refreshing your retirement plan).
- Cognitive load: Not having the time or energy to learn about investing or create a plan.
- Mental health: Research shows anxiety and depression is often linked with smaller retirement savings.
You aren’t alone if one or more of these factors has held you back from prioritizing retirement. “Developing a plan for retirement isn’t easy … Most households don’t have the bandwidth to figure out what they need to be doing,” said Bogan. The good news is recognizing these barriers is the first step to combatting them. And from there, putting smart habits in place (like recurring deposits to your IRA) and celebrating small wins (like increasing your 401(k) contribution annually) can help encourage further progress and help you stay motivated to keep going.
View Why Your Brain Won’t Let You Save For Retirement, here.
2. It’s never too late to invest.
Got investment questions? Finance and investing site Investopedia probably has your answer. We welcomed Investopedia’s Dr. Jon Roberts and Alexandra Kerr to discuss some of the finance related trends they saw during the past year’s volatility and rapid market changes. And during the conversation, we asked the audience which generation they thought was the most active in opening trading accounts in 2020.
The answer is a bit of a shocker. While Investopedia saw almost a 100% increase in millennials’ intent to invest, it saw a nearly 200% increase in new investment account interest coming from boomers, or those aged 65+. “As crazy as last year was, it made everyone do something,” said Kerr. That’s not to say boomers weren’t already investing. But in the year when just about everything went digital, so did this generation’s interest in participating in the market through online trading.
View Trends vs. Reality in Investing, here.
3. Rollovers? Easy as 1-2-3.
We’re not talking about teaching your dog how to roll over — that might not be so simple. But 401(k) rollovers? Ally Invest Senior Investment Strategist Callie Cox explained how you can do this in just three steps:
- Decide whether you want to move that money into your current 401(k) or an IRA.
- Work with your old 401(k) provider to either directly or indirectly transfer your savings to the new account.
- Connect with your new provider to ensure your funds are deposited correctly.
If you’re one of 25 million Americans who has funds sitting in an old 401(k) from a previous employer, a rollover can help you organize your retirement savings, potentially save on fees and expand your investment options.
At Ally Invest, we make it easy to rollover your funds to an IRA, and we’re here to help every step of the way.
View Rollovers 101, here.
There’s more where that came from.
It’s tough to recap all the incredible discussions, demos and deliberations that took place at the Elevate Your Financial Future digital conference in just one post. Fortunately, you can relive each session now (or later) by streaming them demand. Whether you want to fuel your FIRE knowledge or dive into the ways social trends dictate more than just social media, we’re confident you’ll learn something that will elevate your financial future.
Watch the Ally Digital Conference: Elevate Your Financial Future.
Lindsey Bell is Ally’s Chief Investment Strategist, responsible for shaping the company’s point of view on investing and the global markets. She is also President of Ally Invest Advisors, responsible for its robo-advisory offerings. Lindsey has a broad background in finance, with experience on the buy-side and sell-side, in research and in investment banking and has held roles at JPMorgan, Deutsche Bank, Jefferies, and CFRA Research.
Lindsey holds a passion for teaching individuals how to become successful long-term investors. She is a contributor at CNBC, and frequently shares her insights with various publications including the Wall Street Journal, Barron’s, MarketWatch, BusinessInsider, etc. She also serves on the board of Better Investing, a non-profit organization focused on investment education.
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The opinions expressed here are not meant to be used as investing advice. For more information, visit our website.