More mass affluent Americans concerned about their personal finances are deferring their target dates for retirement, according to the latest report from Bank of America's Merrill Edge.

The share of working mass-affluent consumers who now plan to retire later than they did a year ago climbed to 57%, a 36-point jump from the figure cited in Merrill Edge's January 2011 findings.

The semiannual report tracks the financial concerns and priorities of the mass affluent, defined as consumers with $50,000 to $250,000 in investable assets.

An estimated 89% of mass affluent consumers surveyed indicated that rising health-care costs are their biggest concern, followed by worries that their retirement assets will not last throughout their lifetime.
"While the economy is showing signs of a turnaround, our data indicates the outlook among the mass affluent is not quite as positive," said Dean Athanasia, a Bank of America executive. "In spite of their increased efforts to get on track, this group is pushing back their retirement in greater numbers than we've seen before."

A growing number of mass affluent consumers indicated that balancing their short- and long-term finances continues to be one of their greatest financial challenges. An estimated 34% of respondents acknowledged that they are tapping into their long-term savings or investments to meet short-term financial needs while only 27% said the same thing in the Merrill Edge November 2011 survey.

According to the survey:

The mass affluent are concerned about the upcoming presidential election (71%), but they show greater concern about issues such as health-care legislation (80%), the future of Social Security benefits (77%) and the U.S. government's budget deficit (77%).

Parents now pay more for their children's education: An estimated 56% of mass affluent parents have paid more or expect to pay more to send their first child to college than they anticipated when the child was born. Of those who currently have a child in college or one who has graduated, 64% say they paid more because the college or university was more expensive, while 32% wanted to keep their child out of debt.

The mass affluent say they will focus on financial management tasks over the next six months: 85% said they will focus on budgeting, up from 67% in November; 71% said balancing short- and long-term finances, up from 55%; and 68% said saving for retirement, up from 49%. Meanwhile, 77% of respondents noted that mobile banking has helped improve how well they manage their finances.

"The mass affluent are taking more steps now than we saw just six months ago to improve their finances, but balancing their budget for today and saving for retirement continues to be their number one struggle," said Alok Prasad, a Merrill Edge executive at Bank of America.

Younger members of the mass affluent were more likely to embark on home improvement projects than their older counterparts, as 84% of 18- to 34-year-olds took on a project, compared with 77% of 35- to 50-year-olds, 70% of 51- to 64-year-olds and 60% of those 65 and older.

Mass affluent people between the ages of 18 and 34 are much more worried about their financial future than older generations, but less likely to take as many steps to get back on track. Interestingly, 63% of this group indicated they are most likely to manage their investments on their own.

"For Gen Y, this is their first investing experience, and the downturned economy has had a significant impact on their outlook and approach to risk," Athanasia said. "The data shows that Gen Y is proving to be 'Generation Worry,' and we'll see these concerns take their toll as they approach other life milestones like paying for college and retirement."

While long-term financial stability is the greatest concern of mass affluent consumers overall, Gen Y is equally worried about both the present and future. An estimated 79% of Gen Yers express apprehension about caring for an aging parent or adult child while only 49% of mass affluent people do overall. In the short term, 92% of younger mass affluent individuals say financially supporting their family is a concern while only 61% of those surveyed overall did.

Ketchum Global Research & Analytics and Braun Research conducted the Bank of America Merrill Edge Report survey by phone between February 13 and February 29. Braun contacted a nationally representative sample of 1,000 Americans in the U.S. and oversampled 300 mass affluent individuals in San Francisco and Los Angeles.

-Jim McConville