Data & Research May 17, 2016

Stubborn and Familiar Worries Cited By Working Families

Even American families with significant assets saved cite stubborn concerns about the potential loss of an income earner and the likelihood of falling short in a longer-than-expected retirement.
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Eighty-one percent of working Americans are worried about their retirement, according to the latest COUNTRY Financial Security Index update. 

Specifically, Americans are concerned that they could run out of money, not have enough saved to pay for the things they want to do, and not have the resources to pay for medical and long-term care expenses. As to what is holding them back, 40% say not saving enough, 28% say they are worried about the loss of an income earner, and 18% fear another economic recession.

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Among those who are retired, 67% say that they are satisfied with their retirement. However, that leaves 33% of retirees who are not contented. “We found that money issues are driving dissatisfaction in retirement among the third of Americans who report being unhappy,” explains Joe Buhrmann, manager of financial security at COUNTRY Financial. “Many retirees underestimate the cost of their basic living expenses in retirement and, as a consequence, spend more of their nest egg just to get by. We also see that some current retirees do not have enough to afford the things they want to do in retirement.”

Workers can sidestep some of these problems by developing a well-rounded retirement plan, Buhrmann says. “Of those who aren’t living their dream retirement, 57% say it’s because they don’t have enough money for the things they would like to do,” he says. “For those approaching retirement, it’s important to understand your living expenses first to make sure you are also saving enough to afford additional costs, such as travel.”

The COUNTRY Financial Security Index is based on a survey of 1,000 people conducted by GfK.

Data & Research May 17, 2016

Most Americans Have Financial Regrets

Those ages 65 and older feel the most regret about not saving early enough for retirement, while Millennials wish they had a bigger emergency fund.
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A majority of Americans (75%) wish they could change their financial decisions, with 18% saying that not saving for retirement early enough is their top money regret, according to Bankrate.com’s Financial Security Index survey. Not saving enough for emergencies came in second, with 13% citing it as their biggest money blunder.

Not surprisingly, those ages 65 and older feel the most remorseful about not saving early enough for retirement. More than a quarter (27%) of respondents in this age bracket say it’s their biggest regret, compared with 4% of respondents ages 18 to 29 and 17% ages 30 to 49. Conversely, younger Americans are more likely to say they wish they had saved more for emergencies. Twenty-one percent of respondents ages 18 to 29 and 10% of respondents ages 30 to 49 consider this their biggest financial regret, compared with only 7% of Americans ages 65 and older. But Millennials are taking action: Bankrate found that Millennials have put a focus on emergency savings, as they are the only age group to say they are more comfortable with their savings now than they were a year ago.

“Inadequate savings looms large among Americans’ financial distress,” says Greg McBride, chief financial analyst for Bankrate.com. “Whether it’s saving for emergencies or retirement, Americans’ biggest financial regret is not saving enough.”

Other areas that cause financial remorse include taking on credit card debt (9%), not saving enough for children’s education (8%) and excessive student loan debt (9%). Twenty-four percent of respondents ages 18 to 29 cited student loans as their top source of financial remorse, compared with 11% ages 30 to 49, 2% of Americans ages 50 to 64 and 0% of those ages 65 and older.

Despite these financial regrets, Bankrate.com found that its Financial Security Index jumped to its highest reading since February 2015 and second-highest reading ever at 104.7. Those saying their overall financial situation is better than one year ago outnumber those saying it is worse by nearly two to one. In addition, 31% of Americans report higher net worth than one year ago, compared with just 13% that say their net worth is lower now. Both men and women noted improved financial security compared with one year ago, with each posting the best readings in over a year. Comfort level with savings was the only area that decreased in the past year.

More information about the survey is available here.

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