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April 30, 2014 at 11:27 AM
More than four in 10 adults age 25 and older anticipate an improvement in their financial situation, though one in five say they still have a lot of catching up to do.
So concludes the third installment of Northwestern Mutual’s “2014 Planning and Progress Study,” an annual research project that explores Americans’ attitudes and behaviors toward finances and planning. Conducted by Harris Poll on behalf of Northwestern Mutual, the study surveyed 2,092 American adults age 18 or older, of which, 1,915 are aged 25 or older.
Related story: Are disciplined planners happier in retirement?
“Tempered optimism is a reasonable sign of progress, especially since it comes at a time when Wall Street and Main Street are giving somewhat mixed signals,” says Greg Oberland, Northwestern Mutual president. “On one hand, the stock market seems to set new records every day. On the other, we are challenged by high unemployment and a slow-growth economy.”
According to this year’s study, people age 25 and older feel they’re moving — slowly — in the right financial direction:
- 47 percent of Americans believe they are financially secure, a slight uptick from the 43 percent who said so last year;
- 26 percent express feelings of “financial insecurity” today, down from the one in three (32 percent) who said the same a year ago; and
- “Slow and steady” remains the savings and investing strategy most favored by Americans for the third year in a row.
While Americans believe they’re moving in the right direction personally, the study finds that they do not feel the same about the country generally. For example, 49 percent of adults age 25+ believe the U.S. economy is “stuck in neutral,” 29 percent feel it’s “going in reverse” and 22 percent say the economy is “moving forward.”
The study also revealed some findings related to post-retirement financial preparedness:
- 26 percent of adults 25 and older do not believe they’ll be financially prepared to live to the relatively young age of 75, based on their current financial condition, future prospects and long term plan;
- 32 percent don’t believe they’ll be financially prepared to live to 85;
- Nearly 40 percent don’t believe they’ll be financially prepared to live to 95; and
- 21 percent says they are playing “catch up” in respect to savings and investments. They attribute this to debt, unexpected expenses and a lack of effective planning.
