Despite a decline in confidence, most Americans believe their finances remain relatively strong and they can still meet their long-term financial goals, according to findings from New York Life’s Wealth Watch Survey.
Even as inflation remains elevated and the cost of everyday goods continues to rise, the survey found that a majority (62%) of adults still report overall confidence in their ability to meet their financial goals, down from an average of 69% when compared to the beginning of the year.
And even tough confidence has declined since January, a majority (64%) of adults expect their retirement savings to last their whole lives. Compared with other demographic groups, Gen Zers (82%), Millennials (67%) and men (70%) are more likely to be confident that their retirement savings will last the rest of their life.
The survey also found mixed results long-term savings goals. Nearly half (47%) of adults said they have made some progress recently on saving for retirement, but 32% say they have made no progress on this financial goal. Moreover, younger generations are less confident today than they were six months ago that they will be able to retire at their desired age (Gen Zers: 64% vs. 75%; Millennials: 62% vs. 74%).
Wealth Watch is a recurring survey that tracks Americans’ financial goals, progress toward those goals and feelings about their ability to secure their financial futures.
Not surprisingly, macroeconomic factors—including inflation (65%), health care costs (34%) and the national economic recovery (32%)—are the factors that Americans report as being most impactful to their personal sense of financial security. Three-quarters of those surveyed report that inflation has impacted either short- or long-term financial strategies, and nearly 9 in 10 adults (89%) are concerned about a potential economic recession in the U.S.
When asked to describe how they feel about their finances, 30% of Americans are “uncertain” and 29% are “anxious,” but 28% are “hopeful”—findings that align to an extent with sentiments at the start of the year, when 28% of adults were “uncertain,” 22% were “anxious” and nearly 39% were “hopeful.”
“The financial picture for many Americans has changed significantly since the start of the year, and we’re seeing the positive expectations many Americans held about their finances heading into 2022 start to fade,” said Aaron Ball, Senior Vice President and Head of Insurance Solutions, Service and Marketing at New York Life.
Goals Shifting
At the midpoint of 2022, the top financial concerns have shifted from long-range priorities to nearer-term ones—a change from just a few months ago, when 65% of those surveyed were prioritizing their long-term financial goals.
Americans now report that their current concerns are paying for daily expenses like groceries and gas (39%), monthly bills (36%) and personal financial emergencies (24%). Respondents also reported drawing an average of $616.73 from their savings to cover higher everyday costs.
The top financial goals on which respondents made continued progress in June include developing and maintaining a financial budget (54%), leveling out month-to-month spending (46%) and eliminating debt (44%). To cut back on spending, nearly half (45%) of Americans are reducing dining out and ordering from restaurants, reducing travel and vacations (39%), and reducing event attendance (37%).
And with members of all generations facing difficult financial headwinds, New York Life also saw an uptick in interest in financial guidance, especially among Gen Zers and Millennials. In fact, more than half of respondents in these groups (65% of Gen Zers and 56% of Millennials) have utilized financial advice in the last month. The survey also found that 58% of parents sought financial advice in the past month compared to 42% of non-parents.
“Regardless of the economic environment, the partnership of a trusted financial professional is critical to ensuring short- and long-term financial goals can be achieved,” Ball emphasizes.
The poll was conducted between June 23–24, 2022 among a national sample of 2,210 adults.
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