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June 25, 2021 at 04:32 PM
What You Need to Know
- While 58% of U.S. adults say they're in financial recovery mode, 89% of them believe they'll make a full comeback, Northwestern Mutual found.
- Though a promising number of people are recovering financially, setbacks are not equally distributed, the survey found.
- Maintaining financial momentum over time requires a long-term view, but planning horizons today are quite short.
Fifty-eight percent of U.S. adults say they are in financial recovery mode, but among them, 89% express confidence that they will ultimately achieve a full financial comeback, according to a study released this week by Northwestern Mutual.
Thirty-four percent said they are in late-stage recovery, having suffered losses but mostly, if not fully, recovered to pre-pandemic levels and feeling confident in their ability to achieve long-term financial security.
Forty-seven percent reported that they are in mid-stage recovery. They suffered losses and have begun making up ground, but have yet to reach pre-pandemic levels and are still optimistic about their prospects for long-term financial security.
Least optimistic are the 18% who said they are in early-stage recovery. They suffered losses, are still in decline and are unclear how they will achieve long-term financial security.
“We’re seeing a nation still reeling from the financial instability that the pandemic has dealt, but there’s also evidence that a promising number of people are on their way back,” Christian Mitchell, chief customer officer at Northwestern Mutual, said in a statement.
“While it’s great to see progress, it’s also important to recognize that the setbacks are not equally distributed. No matter where people are on their financial journey, they need a roadmap; they need guidance; they need a plan.”
The Harris Poll conducted an online survey on behalf of Northwestern Mutual in March among 2,320 American adults.
Trending in the Right Direction
The survey results showed that across a range of different categories, year-over-year numbers indicate that people’s financial lives are trending in the right direction.
- Average personal savings: up from $65,900 last year to $73,100 today.
- Average retirement savings: up from $87,500 to $98,800.
- Financial security: up from an average of 6.3 on a 10-point scale to 6.5.
A closer look at savings trends reveals a more nuanced story. Thirty-three percent of respondents say they have been able to save more over the last year, while 31% say they are saving less or have stopped saving altogether.
Only 9% say they have tapped their savings and are going backward.
