Data & Research December 12, 2024

Americans Looking Ahead to Year of ‘Living Practically’

New Year’s financial resolutions include building back up emergency savings tapped in 2024, according to Fidelity’s 16th New Year’s survey.

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Inflation fatigue and market concerns may make for an austere New Year’s holiday in the U.S., according to Fidelity’s annual “New Year’s Financial Resolutions Study” released Thursday.

According to Fidelity’s survey of more than 3,000 Americans aged at least 18, consumers are mostly focusing on short-term savings, building up emergency savings and licking their wounds from managing through a higher cost of living in 2024.

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“Americans are still recovering from the impacts of inflation and high costs over the past couple of years,” says Rita Assaf, a vice president of retirement products for Fidelity. “That doesn’t leave much room for the unexpected. … Given these factors, it’s really no surprise that more than half [53%] are feeling a bit overwhelmed by their personal finances and are choosing to enter 2025 more conservatively.”

In this year’s study, Fidelity found that 72% of respondents experienced a financial setback in 2024, which contributed to 46% dipping into emergency funds at some point in the year. Another 39% said they were not able to stick with their financial resolution for 2024 because they had less money due to inflation’s impact on day-to-day expenses.

“Emergency savings has been a rising concern over the past several years—likely becoming more prominent with the pandemic and remaining a top concern as costs rose during the pandemic and have fluctuated up and down ever since,” Assaf says.

That type of financial struggle apparently leaves a mark. In 2025, 79% of respondents plan to build up their emergency savings, and 65% of people are considering making their New Year’s resolution a financial one.

These concerns may flow to retirement and other long-term savings, according to the survey data. In the 2023 study, 45% of respondents said they would prioritize short-term savings goals over long-term ones. This year, that figure has gone up to include more than half of respondents, with 55% planning to focus first on short-term goals.

That shorter-term outlook may reflect Americans’ top financial focus areas. When asked about financial concerns, the item that got the most checks from respondents was unexpected expenses at 38%, followed closely by inflation and its impact on day-to-day costs and savings at 37%. Meanwhile, economic uncertainty and the potential of a recession in 2025 came in at 32%.

In a separate survey of 2,000 Americans released Tuesday by loan provider Achieve Co., respondents continued to express a theme of being financially bruised by 2024. Among those surveyed, 81% reported having personal debt in 2024, and 61% ranked the year among the five most financially challenging of their lives.

Achieve also asked respondents where they looked to trim expenses in 2024 as compared with 2023. Retirement savings made the list, but did not top it:

  • Discretionary spending (39%);
  • Emergency savings (26%);
  • Retirement savings (20%);
  • Gifts (31%); and
  • Travel (25%).

Fidelity did point to some positive news for the year ahead: 72% of respondents have a plan in place for reaching their financial goals. The top goals for this group were saving more money (43%), paying down debt (37%) and spending less money (31%).

“It’s good to see so many Americans planning to be proactive about building up an emergency savings fund,” Fidelity’s Assaf says. “Putting away money from each paycheck to protect against emergencies can provide big dividends as unexpected expenses pop up. Some employers are even stepping in to help by providing access to emergency savings accounts, so we strongly suggest checking with your employer to see if a benefit like this is available to you.”

Data & Research December 12, 2024

Why Women Are Navigating a New Financial Landscape

Non-retired women see the responsibility of securing a steady lifetime income being shouldered by individuals, not employers, according to a new survey by Corebridge.

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A shift is underway in how Americans, particularly women, plan for retirement. For non-retired women, the responsibility of securing a steady income stream for life is increasingly falling on individuals, rather than traditional pensions or employer-sponsored solutions.

According to a new Corebridge Financial study, “Women Speak Out on Money Matters,” a clear contrast exists between the retirement resources of retired and non-retired women. While savings and money market accounts are the most widely owned assets among both groups, the second-most common asset diverges dramatically. Among retired women, 33% reported owning a pension, while only 9% of non-retired women said the same. Conversely, 31% of non-retired women reported holding workplace retirement accounts, compared with just 16% of retired women.

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This difference underscores the continuing evolution of the retirement landscape, according to Corebridge: Nowadays, pensions are rare, and individuals must navigate alternative solutions. The study revealed that retired women are nearly three times more likely than their non-retired counterparts to own an annuity, with ownership rates of 13% and 5%, respectively.

Financial advisers can start out by helping retired women understand their retirement income needs, says Terri Fiedler, president of retirement services at Corebridge Financial.

“As with anything in life, it’s much easier to build an income strategy when you know what it is you’re working towards,” she says. “With that foundation established … advisers can then help assess the current sources of income a client has and evaluate how much income those assets will provide and for how long.”

Depending on the retiree’s needs and current retirement income situation, an adviser may also want to consider speaking with them about potentially adding other income sources to their portfolio such as an annuity, according to Fiedler.

Financial Concerns

Inflation was the leading financial concern for women, both retired and non-retired, according to the research. Among non-retired women, 52% identified inflation as their top stressor, followed by worries about retiring comfortably (34%) and running out of money in retirement (30%).

These concerns closely mirrored those of retired women, 57% of whom also cited inflation as their primary financial challenge. Running out of money in retirement ranked second for retired women at 39%, underscoring shared anxieties across both groups about the financial demands of a longer, costlier retirement.

“Women have made significant strides in career advancement, educational attainment, and financial well-being,” says Fiedler. “But for retired women, the realities of their working years may have been very different, possibly faced with larger pay gaps or career interruptions due to caregiving responsibilities.”

Corebridge’s research found that 56% of retired women took at least a month out of work to care for someone or provided care for someone while still working. Fiedler says these are factors that may have impeded the ability to prepare for retirement.

Women in Retirement

The survey found that only 19% of retired women report retirement to be exactly as they envisioned, while 26% say it is not at all what they expected. Cost emerged as the most significant surprise, with half of retired women finding retirement more expensive than anticipated. Additionally, 46% retired earlier than planned, which likely compounded financial challenges.

“But it’s essential to remember that no matter where someone is in their financial journey, it’s never too late for them to take action,” says Fiedler. 

Among retired women, the financial step most credited with successful retirement preparation is working with a financial professional, as reported by 35% of respondents. However, 38% of these women wished they had started this relationship earlier. Other key steps included saving early and maximizing contributions to employer retirement savings plans. The nationwide study surveyed 4,023 adults, including 2,574 women, between May 2 and May 8.

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