American Confidence Takes a Dip This Year

American investors wish they were doing a better job, and on top of their financial wish list is building up an emergency fund.

For the second year in a row, Americans feel less confident about their financial situation, according to “Investor Mindset: Attitudes, Concerns, Beliefs & Goals,” an investor mindset survey from Hearts & Wallets. This year, just 13% of households described themselves as “confident, comfortable and secure” about their finances, and only one in three working Americans believe their retirement savings are on track.

The study, an overview of American family finances and investor buying patterns, finds moderate to high levels of anxiety in one in three households, up from one in four households in 2013. The increase is driven by those with less than $100,000 in investable assets, but at all income levels, anxiety is higher.

The top three concerns for investors are the future of Social Security, what lies ahead for health care in the U.S. and setting aside a sufficient amount of retirement money. Concerns about Social Security moved up in this year’s study, from third place to first.

People’s belief that the Social Security system will be a reliable source of retirement income took a dip of 2 percentage points nationally—a small but significant drop, the study contends. In contrast with last year’s study, when 36% of households believed they were on track in building a retirement nest egg, fewer households are confident, at 31%. But despite these headwinds, Americans are upbeat assuming responsibility for their own retirement instead of leaving it to the government or their employers.

In 2015, the top financial goal for Americans continues to be “build up my emergency fund” (42%), followed by the flexibility to “work less/spend time as I want when I am older” (34%) and “take a vacation” (34%). Most goals, including wanting to prepare for stopping work completely, which feels unattainable to many, held steady or decreased slightly in percentage points in 2015.The exception was “buy real estate,” which rose 4 points from last year, to 17% in 2015

NEXT: Financial security takes a dive

Significantly fewer Americans (13%) felt “confident, comfortable and secure” in 2015, a substantial drop of 6 percentage points from 2013’s 19%. Nearly 90% of households expressed some uneasiness about finances in this year’s study, with more than two-thirds saying they wished they were currently doing a better job of saving. Among those with less than $100,000 in investable assets and younger investors, ages 28 to 52, that yearning is especially strong. Almost half of households (45%) describe themselves as very inexperienced investors compared with about a third (35%) the year before. More than two-thirds (41%) say they are “confused by all the investment information out there.”

“Consumers are feeling more inexperienced because they aren’t sure what investments they should make or where to go for advice,” says Chris J. Brown, Hearts & Wallets co-founder and partner, noting they want the government to solve their most pressing concern of the reliability of Social Security.

Even more strongly than last year, a majority of workers (58%) believe providing for retirement is their responsibility, not their employer’s. More than half of workers (58%) strongly disagree with the statement “my employer is responsible for providing for my retirement,” up from 55% in 2014.

Consumers are split on the value of getting assistance with their finances from financial professionals. One-third (32%) “see value” in paying for professional advice. Those with less than $100,000 in assets and those with $100,000 to $500,000 in assets have the highest unmet need in terms of advice. Americans, especially younger consumers, want to be investment-savvy. Four in 10 (39%) want to know more about the companies behind their mutual funds, especially those ages 28 to 39, up from 30% in 2012, to 44% in 2015.

“It’s healthy that some consumers want to pay for advice from financial professionals, while others prefer solutions that embed advice into products, and still others just want the lowest-cost solution of indexing,” explains Laura Varas, co-founder and partner of Hearts & Wallets. “That’s why competitive markets exist: to provide an array of differentiated choices at fair prices. One size never fits all. Competition and informed consumers keeps prices down and quality up.”

“Investor Mindset: Attitudes, Concerns, Beliefs & Goals” gives a view of how investors feel about their financial situation, their investing experience and risk tolerance, their top financial goals and concerns and how these have changed from previous years, using data from about 5,500 U.S. households annually. Working Americans are defined as households where the primary breadwinner is currently working full- or part-time, or is unemployed but seeking employment, and has no plans to retire.