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Life Health > Health Insurance > Life Insurance Strategies

How Emotions Are Affecting Financial Confidence During Pandemic

By Michael S. Fischer

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Amid the coronavirus pandemic, Americans are experiencing a wide range of emotions, often negative and positive ones in equal measure, and this ambivalence is reflected in perceptions of their finances, according to data released Monday.

New York Life commissioned Morning Consult to conduct two online surveys among a national sample of 2,200 adults. The first survey was fielded March 23–24, the second April 9–10.

The March results showed that respondents’ strongest emotion was worry, followed closely by feeling loved.

Fifty-four percent reported feeling scared, and 51% hopeful; 56% had feelings of sadness, balanced by 49% who had a sense of connectedness.

Fifty-eight percent also said they had been feeling strongly reflective.

Unsurprisingly, the data revealed that positive feelings were linked to long-term financial confidence. Fifty-six percent of survey participants who said they felt hopeful also said they felt confident that their retirement savings could last for the rest of their lives.

This compared with 44% who reported current feelings of restlessness, worry, anger, sadness or fear. But even the hopeful were experiencing near-term anxiety.

“COVID-19 has impacted absolutely every aspect of our lives and our research shows that Americans are anxious and hopeful in equal measure and these emotions are coloring how they feel about their finances,” Aaron Ball, head of insurance solutions at New York Life, said in a statement.

“The key is to stay focused on what you can do now to protect the health, safety and financial future of yourself and your loved ones and to seek help from a trusted professional to develop a strategy.”

Generational Differences

Forty-seven percent of baby boomers in the March survey and 53% in April expressed confidence that their retirement savings would last the rest of their lives.

However, boomers were the least confident generation about the status of their savings overall, with 39% feeling less confident in March than in February, and 40% feeling less confident in April than in March.

“This split between near-term anxiety and long-term confidence seems contradictory, but it reveals that a plan can make all the difference,” Dylan Huang, head of retail annuities at New York Life, said in the statement.

One in three Gen Xers surveyed said they were more likely to have to care for a parent because of the COVID-19 outbreak, the number increasing from 27% in late March to 34% in early April. But only 39% expressed confidence in their ability to do so.

“The coronavirus pandemic has required all of us to re-evaluate our priorities and now more than ever we are seeing caregiving rise to the top of the list,” Ball said.

“Although Gen X is feeling the impact of caregiving responsibilities, they are increasingly confident about their longer-term economic outlook and are likely to update their financial plans as a result of what they are currently experiencing.”

Asked in March whether their financial plan prepared them for the unprecedented market volatility, 78% of respondents said no or that their plan needed to be adjusted, the number dropping to 71% in April. Yet only about half in both surveys said they were likelier to reevaluate their current plan or create a new one.

About a quarter of participants in both waves of the survey said recent events have made them more likely to seek out expert advice to help revise their plan.

The survey found that those who expressed anger in April were the most likely to seek assistance from a financial professional, followed closely by those said they were feeling sad, scared and reflective.

When asked in March how likely they were to seek assistance from a financial professional when updating their financial plan, hopeful respondents were 8% likelier to say they would do so than not do so.

Younger millennials were the most likely and boomers the least likely to say they would seek assistance from a financial professional to update their financial plan. About two in five older millennials and Gen Z were likely to seek financial guidance for this task.

— Related on ThinkAdvisor:

Michael S. Fischer

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