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Saving more, planning not top priorities in survey

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By Becky Yerak
Sunday, April 28, 2013, 9:00 p.m.

Melody Sucharda, a certified public accountant with a master's degree in taxation, always makes the maximum contribution to her 401(k) plan. Married with no children, the corporate tax manager also has some savings set aside for emergencies. Still, the Wauconda, Ill., resident, 42, sees room for improvement in her finances.

“I would like to put a little more into savings this year,” said Sucharda, noting that much of the couple's short-term cushion was wiped out in recent years after a failed business investment.

When it comes to striving to save, Sucharda is in the minority, a recent survey shows.

Only 46 percent of respondents in a PNC Financial Services Group Inc. survey said they plan to increase their savings and investing this year.

What's more, these are savvier consumers. The survey consisted of 1,020 U.S. adults ages 35 to 70, with more than $100,000 in investable assets. A quarter of the sample had more than $1 million in investable assets.

“People are finding it easier to develop habits devoted to physical fitness than financial fitness,” Stephen Pappaterra, PNC's head of wealth planning, said. Of respondents to the survey, 19 percent believe they are doing better than expected on saving for retirement; 47 percent believe they're where they need to be.

Worker savings remain modest, and many retirees — and people approaching retirement — haven't socked away enough to provide themselves a comfortable standard of living after they quit working, PNC and others have found. Fewer than half of Americans have tried to calculate how much money they'll need for retirement, according to the Employee Benefit Research Institute, a nonprofit focused on economic security issues.

Sucharda has contributed to a 401(k) at every job since college. She said, however, that she can do a better job of living within her means.

“We have a bad habit of buying things we may not need because they're a good deal,” she said.

The mortgage from the home they bought in 2006 is also hindering them from putting more into savings.

“We can't refinance since the market value has declined,” Sucharda said.

In the PNC survey, 43 percent said their best financial moves include putting as much as they could into retirement plans, as Sucharda has, while 15 percent say living within their means is their best plan of action.

Chris Hartrich and his wife both grew up in the Chicago area but moved to Neenah, Wis., about three years ago for his insurance job. They have four children, with two in college and one a senior in high school.

Partly through budgeting and limiting discretionary spending, they consider their financial condition “healthy,” having been able to finance their kids' college educations and still save for retirement.

Hartrich said he worked with a financial adviser last summer and said he'll probably continue to do so every other year to get feedback on the family's financial planning. In the PNC survey, 43 percent of respondents said they plan to meet with a financial planner in 2013.

While only 46 percent of PNC survey respondents said they plan to boost their saving and investing, 70 percent said they plan to exercise more.

Hartrich's wife, a nurse, says increasing his exercise “would be more valuable than increasing our savings” partly because “the biggest unknown as I approach my 60th birthday is health care costs in retirement.”

The couple are unsure when they'll retire but have begun shifting assets from stock funds into more conservative fixed-income funds.

They're trying to pay off their mortgage as fast as they can, and the move to Wisconsin might hasten that goal.

“When we moved up here we were able to purchase a much less expensive home so that freed up some assets for college costs,” he said.

PNC's survey findings had a margin of error of plus or minus 3 percentage points. The online survey, done in January and designed by Artemis Strategy Group, represents about a fifth of U.S. households.

Becky Yerak is a staff writer with the Chicago Tribune.

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