A Majority of U.S. Consumers Lack Confidence in Stock Investments, Express Concern about Funding Retirement, a Realized Survey Finds

  • Some 62% would rather put their money in tangible assets like investment property as opposed to stocks, which they deem too volatile and unfair
  • Overwhelming majority (75%) see real estate as a valuable investment; Unaware that tax burden on inherited or investment properties has the potential to be deferred entirely

AUSTIN, TEXAS, APRIL 26, 2021 –A majority of U.S. consumers —regardless of income level—say they are worried that they will not have enough money in retirement to maintain their desired lifestyle. Moreover, despite this widespread concern, some 59% say they have real trepidation about investing their money in the stock market, according to new research published by Realized, a technology-enabled platform that provides Investment Property Wealth Management.® The survey, “Consumer Perspectives on Retirement, Investing, and Property Ownership,” reveals that the stock market’s volatility and complexity, as well as perceptions of a system rigged in favor of big banks and hedge funds, are the prevailing reasons underpinning consumers’ low confidence.

The Harris Poll was commissioned by Realized to survey more than 2,000 Americans across generations to better understand their confidence to fund the lifestyle they want in retirement, as well as their general awareness of and comfort with alternative investments like real estate when seeking to generate income and grow wealth.

A Shared Concern

According to the survey findings, worries about retirement transcend income levels in the U.S.. These concerns were most prevalent (62%) in consumers with incomes between $50K-$99K while affecting more than half (55%) of consumers who earn $150K+ annually. Interestingly, respondents (60%) who earn less than $50K per year have a slightly lower level of concern about their financial wellbeing in retirement than those with incomes between $50K-$99K.

Open to Alternatives

A majority (62%) of respondents say they prefer to invest in tangible assets, such as investment properties, rather than traditional investments like the stock market, and have strong confidence across the board (75%) that real estate can be a valuable investment for retirement. However, some 46% have the perception that real estate investing is only an option for wealthy people. Additionally, for the generations closest to retirement or those more likely to either inherit or pass down property —Generation X, Baby Boomers and the Silent Generation—additional concerns and misconceptions may prevent them from diversifying their wealth with investment properties.

“What we continually hear from our clients and what we are seeing bear out in the results of this survey is that people value tangible assets as an investment option and have a degree of comfort putting their money in an alternative asset class whose performance may be less volatile and historically less correlated to the stock market,” said Rob Johnson, Head of Wealth Management at Realized. “We remind clients that there’s risk in virtually every asset class, but we believe the key to longer-term investing success is diversification. So, it might not be a bad idea to explore a retirement roadmap that includes investment property.”

Johnson noted that according to the survey findings, the potential value of real estate investments in retirement are recognized by consumers; however, obstacles—chiefly administrative challenges—showed that many planning for retirement need additional resources and consultation to understand how they may invest in rental properties.

Potential Benefits & Challenges

The Realized survey findings show that another major consideration among U.S. consumers is money and wealth management – both the amount they have in the bank and the sources they look to for financial advice. Some 18% of prospective property investors view managing the financial aspects of the acquisition of real estate as a challenge, and more than three-quarters (76%) of that group cite this as a major driver of their decision not to invest in property.

Despite being most likely to utilize financial advisors and wealth managers as sources of information and advice on investing and wealth management, survey respondents from older generations—above the age of 40—had several misconceptions about the financial options available to them.

In fact, more than 80% of all survey respondents were unaware that the tax burden on inherited or investment properties has the potential to be deferred entirely through wealth management and the ability to help consumers strategically utilize possible after-tax cash flows and risk-adjusted returns.

Consumers’ responses additionally underscored the need for qualified professionals in managing investment property wealth and portfolio diversification. There is currently a perceived knowledge gap between financial advisors’ knowledge on real estate investing, and real estate agents’ knowledge of meaningful diversification and managing tax exposure for investment properties.

David Wieland, Realized Founder and CEO, said, “These survey findings support what Realized believes: Investors across all generations want and need help including tangible investment properties in their portfolios, alongside stock, bonds, and other financial assets. Adding investment properties to clients’ portfolios may help build and preserve wealth in several ways, including tax-advantaged income, deferral of capital gains, diversification, as well as a hedge against inflation.”

Other notable findings from the Realized survey include:

  • Those who currently own one or more investment properties reported significantly high levels of confidence (86%) in real estate’s potential to provide steady income in retirement compared to those who do not (48%)
  • Older generations in search of a hands-off solution report the challenges of finding good tenants (Boomers: 42% / Silent: 48%) and ongoing costs of property maintenance (Boomers: 41% / Silent: 41%) as the most recognized challenges associated with investment property
  • The potential to provide a steady monthly income was consistently cited (54%) as the greatest benefit of investment property ownership; respondents also highlight the ability to pass down property to future generations (33%), the ability to sell the property as a means of financing retirement (32%) and access to tax advantages (29%)

The complete Consumer Perspectives on Retirement, Investing and Property Ownership survey findings are available here.

Methodology

The Harris Poll conducted the survey online on behalf of Realized from February 25–March 9, 2021, among 2,000 US residents 18+ who live in the United States. Figures for age by sex, education, income, race/ethnicity, household size, marital status, and region were weighted where necessary to bring them into line with their actual proportions in the population.

About Realized Holdings

Realized is a technology-enabled platform that strives to provide tax-efficient wealth solutions to families that own legacy investment properties and other appreciated financial and capital assets. Investors use the Realized platform to tax-efficiently transfer wealth from legacy properties and assets into passive commercial real estate portfolios customized to their specific needs.

Securities Disclosure

Realized Direct is operated by Realized Technologies, LLC, a wholly owned subsidiary of Realized Holdings, Inc. (“Realized”). Equity securities offered on this website are offered exclusively through Thornhill Securities, Inc., a registered broker/dealer and member of FINRA/SIPC ("Thornhill"). Investment advisory services are offered through Thornhill Securities, Inc., a registered investment advisor. Thornhill Securities, Inc., is a wholly owned subsidiary of Realized Holdings, Inc. Check the background of this firm on FINRA's BrokerCheck.

Investing in alternative assets such as Qualified Opportunity Funds or Delaware Statutory Trusts involves higher risks than traditional investments and is suitable only for sophisticated investors. Alternative investments are often sold by prospectus that discloses all risks, fees, and expenses. An investor should consult with his/her tax advisor prior to investing.

Investments made through Realized Direct are not securities, they are direct real estate property purchases.

 

Media Contact
For Realized Holdings
Donald Fantozzi
dfantozzi@sloanepr.com