Data & Research June 27, 2018

‘Wants’ Trump Long-Term Financial Priorities for Many Americans

For one-third (33%) of Americans, spending on an experience has taken priority over achieving some larger financial goals, including saving for retirement, using the money for other financial investments, or paying off student debt.

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A slim plurality of Americans rate their overall level of financial security as either excellent or good (49%) versus those rate who rate their financial security as fair or poor (46%), according to a survey in partnership with COUNTRY Financial. These total numbers remain unchanged from the measurement dating back to November 2017.

As American age, their rating of their financial security improves: Ages 50 to 64 (54% rate excellent or good); age 65 and older (69% rate excellent or good). Younger Americans are less likely to rate their financial security as excellent or good (ages 18 to 34: 40%)

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Nearly nine in 10 Americans (88%) report they are spending weekly on things they want but don’t absolutely need. About two in three (63%) are spending $50 dollars a week or less on the “wants” and one-quarter (24%) are spending more than $50 a week on the “wants.” Four in ten Americans (40%) admit that they have tapped into their savings to pay for something that they really want, but didn’t absolutely need.

While most Americans choose savings over experiences (66%), for one-third (33%) of Americans, spending on an experience has taken priority over achieving some larger financial goals, including saving for retirement (12%), using the money for other financial investments (10%), or paying off student debt (5%).

Notably, this behavior is more likely to be taken by someone ages 35 to 49 on all choices than other age group, followed by younger adults ages 18 to 34. Twenty-four percent (24%) say they have simply delayed adding money to their savings account so they could have an experience instead.

However, asked what they might do with the money if they were given $1,000, one-third (32%) say they would drop the money into a retirement or savings account and another one-third (32%) would pay down debt.

The survey was conducted May 11 through May 13, 2018, among 1,003 adult Americans, ages 18 and older.
Data & Research June 27, 2018

Gig Workers Face Financial Challenges

Prudential says today’s financial wellness challenges may lead to tomorrow’s retirement shortfalls.

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Gig workers, be they Millennials, Gen Xers or Baby Boomers, are all facing financial challenges, which could adversely impact their retirement down the road, according to a new research paper from Prudential Financial.

While most Millennials seek out gig work for its flexible hours, Gen Xers and Boomers are more apt to seek it out of necessity. Gen Xers are the least satisfied with gig work, and wish they could switch to a traditional job. Sixty-three percent of this group say they are struggling financially, compared to 49% of Millennials and 32% of Boomers.

Forty percent of Gen Xers say that because of the inconsistent hours and cash flows, it is hard for them to stick to a budget, and 37% say it makes it hard to makes ends meet.

Gen X gig workers are also more likely to live in a single, relatively low-income household. They are typically mid-career, doing mostly nonprofessional work. On average, they earn $36,300 a year, compared to $43,600 earned by Boomer gig workers. This is particularly striking, as Gen X gig workers work more hours.

“Gen X gig workers seem to face the most financial wellness challenges, but do not have as much time to shift their career paths and improve their financial lives,” says Jamie Kalamarides, president of Prudential Group Insurance. “These findings are a call to action for advisers, employers and policymakers, who have the ability to help gig workers set up retirement savings plans, acquire adequate insurance coverage and develop budgets.”

Millennials in the study are better off because they live in households with multiple sources of income and they perform more professional types of gig work. Additionally, they are more likely to use technology-enabled job search engines and to be a stay-at-home parent or student, which, Prudential says, are likely temporary situations.

Boomers have higher levels and multiple sources of income, as well as access to employer-sponsored benefits. They also are more likely to be married or have a partner, to own their own home and not have children younger than 18.

The Harris Poll conducted the online survey for Prudential in January and February among 1,524 workers, of whom 577 were exclusively gig workers.

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