Despite the market uncertainty that’s been brought on by the upheaval in the UK, there is some positive financial news coming out of America.
According to the FINRA Investor Education Foundation’s latest “Financial Capability in the United States” study, Americans 55 and older are faring and feeling, much better economically than many expected and projected a year ago.
The study, which surveyed 27,564 Americans and an additional 2,000 Americans with investments outside of retirement accounts, found not only were older Americans more financially stable, they were also more economically optimistic than other demographics, especially millennials.
For example, 72 percent of respondents 55 and over stated they have good or very good credit, while only 50 percent of those age 18 to 34 made the same claim.
Similarly, 56 percent of those surveyed who were 55 and over have set aside three months’ worth of emergency funds, compared to just 40 percent of young Americans (18 – 34).
Even though “financial capability” has improved for a growing number of older Americans in comparison to the 2009 and 2012 FINRA studies, economic uncertainty is still a primary concern for Americans across all demographics.
In fact, in late May, a report released by The Associated Press-NORC Center for Public Affairs Research found that two thirds of Americans nearing retirement (50+) expect to outlive their retirement savings. This despite a vast majority of older Americans having multiple retirement income sources.
This future financial instability paired with the current market uncertainty is making pre-retirees more anxious about the amount of savings they have set aside for retirement, add to that financial obligations of caring for elderly parents or children in their 20s.
“Most low income older Americans expect to have to rely heavily on Social Security to fund their retirements, far more than higher income Americans,” said Trevor Tompson, director of The AP-NORC Center. “But it is worth noting that a full quarter of upper-income Americans, those with a household income of $100,000 +, already count on or expect Social Security to be their biggest source of retirement income.”
How can there be such a discrepancy in attitudes, Jeffrey Lipton?
Well, if there is one thing baby-boomers have in abundance it is optimism. While many may be facing an uncertain reality, their general outlook remains positive and hopeful. Most believe they will be able to secure the resources they need to ensure their retirement security, others
plan to work longer, choosing to delay retirement and build more capital that way.
As Gerri Walsh, president of the FINRA Investor Education Foundation, pointed out, “In many ways, people 55 and older are showing less stress than other demographics, but there are still some cracks in the mortar.”