What You Need to Know
- Sixty percent of U.S. adults surveyed said they have been able to build up personal savings over the past two years.
- 69% said they expect to keep their higher savings rate in place.
- Average participant savings fell 15% between early 2021 and early 2022.
Financial advisors can prove their value now by helping clients stick with the budgeting and saving decisions they made during the first few months of the COVID-19 pandemic.
Christian Mitchell, the chief customer officer at Northwestern Mutual, and Aaron Bell, an advisor in the insurer’s advisor network, talked about retirement savers’ mental road map Tuesday, during a briefing the company held to go over the company’s latest consumer survey.
Mitchell said he believes that U.S. consumers converged on efforts to stabilize their finances in early 2020, but that consumers may now be about to set out on one of several different paths.
Some might stick with the same, sensible path, and others may become even more disciplined super savers, Mitchell said.
But he suggested that others might simply act as if the pandemic never happened and move on, while others might decide that the world is too uncertain for them to bother to save at all.
Those consumers might say, “‘I’m just going to live my life,’” Mitchell said.
One possible sign that a significant percentage of consumers are backsliding, because of their own financial choices or the effects of the economic forces around them: Participants’ average savings reported fell to $62,000, down 15% from the average that participants in Northwestern Mutual’s 2021 survey reported.
The Consumer Survey
Northwestern Mutual is a Milwaukee-based, policyholder-owned mutual life insurer.
This year, the company commissioned an online survey of 2,320 U.S. residents ages 18 and older. The new survey period ended Feb. 17 — shortly before Russia’s invasion of Ukraine.
The company also commissioned a similar survey in March 2021.
The New Numbers
About 60% of the participants in the latest survey said they had been able to build up personal savings over the past two years, and 69% said they expected to be able to keep their higher savings rate in place.
Overall, “there’s this great story of human resilience,” Mitchell said.
But there are also some signs that some people who toughened up to get through the early months of the COVID-19 crisis are now relaxing some.