Retirement Still a Concern, but Everyday Expenses Take Priority

Day-to-day expenses might be top-of-mind for Americans, but they are still concerned about having a secure retirement, according to a recent survey from AXA Equitable Life Insurance Company.

AXA recently surveyed Americans age 25 and older with annual incomes of $50,000 or higher, and found that the picture looks bleaker than it did for surveys the company conducted in October and April (see “Financial Professionals Most Trusted Source, Survey Says“). In the latest survey, 65% of those polled said they were concerned about meeting everyday expenses, including the ability to pay their mortgage, should they lose their job, up from 54% a year ago.

“Our research showed that paying bills was a middle-of-the-pack concern last April,” said Christopher “Kip” Condron, chairman and chief executive officer of AXA Equitable, in a release of the survey results. “The fact that it is now a top priority underscores how the yearlong market volatility has shaken Americans’ sense of security about their immediate financial future, most notably as a result of job instability.”

AXA suggested that this concern about day-to-day expenses might have led consumers to be less focused about retirement savings. Since last year, consumers’ concern about keeping inflation, taxes, and declining markets from eroding retirement savings has dropped three spots on the overall ranking of financial concerns (from second to fifth). Similarly, concern about protection from market conditions fell two notches to the eighth spot.

Although meeting day-to-day financial obligations is clearly more important, the study found that securing guaranteed income for life remains the top priority for 69% of Americans polled. While half of the respondents indicated they have done nothing to change their financial picture, the results show that more have chosen to do something since October (26% compared to 21%).

“The fact that people are still concerned about the health of their retirement during the market volatility we are experiencing makes it clear that they still understand the importance of preparing for their financial future,” said Condron. “What is alarming, however, is that so many are still not taking the steps needed to achieve those goals.”

Men, Women Agree on One Thing: Retirement Will Have to Wait

The study shows that approximately 40% of men and women within 10 years of retiring plan to postpone retirement. Specifically, 39% of women said they will delay retirement by four years to a revised age of 66. Forty percent of their male counterparts will wait an extra three years and now expect to retire at the age of 64. In both cases, current market volatility is the primary reason for the shift in thinking, according to the survey.

In keeping with the generalization that women are often more conservative investors than men, women respondents show more concern about the economy, yet are less likely to make changes in response to their concern. While 75% of women polled said that receiving guaranteed income for life is a priority, only 58% of men agree, according to the results. Similarly, 74% of women said that paying everyday expenses is “very important,’ but just 54% of men shared the same sentiment. In response to market conditions, the study shows that men are also more willing than women to make changes:

  • Almost three in 10 men (28%) expect to invest in a new product, compared to 20% of women.
  • More than six in 10 men (61%) plan to shift the asset mix of their investments, compared to 51% of women.
Affluent Investors Show More Concern

The latest survey also found that amid current market volatility, behaviors and attitudes not only varied by gender, but by age and affluence. Notable results include:

  • Approximately seven in 10 of the affluent polled (67%) are concerned about their ability to pay everyday expenses if they were to lose their job, compared to 60% of the non-affluent. (Affluence is defined by AXA as having an annual household incomes of $100,000 or greater.)
  • Six in 10 affluent are worried that they may not be able to pay their mortgage if they were to lose their job, compared to slightly more than half (54%) of the non-affluent.
  • More than three in four (76%) of the older affluent (age 45 and up) polled are concerned about securing guaranteed income for life, compared to just 63% of the younger affluent (ages 25 to 45).
  • Less than half (48%) of the younger affluent polled believe their personal financial situation has declined in the past year, while 66% of the older affluent feel they are worse off today.

The online survey was conducted in February by a third-party research firm among 1,116 randomly chosen U.S. consumers.