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New York Life | September 17, 2024
Sixty-two percent of adults surveyed thought they were financially prepared for life events, but were not; 39% wish they had sought help.
NEW YORK - New York Life’s latest Wealth Watch survey finds that American adults overwhelmingly report they are not financially preparing for major life events like purchasing a home, starting a family, changing careers, or retirement. Half of adults who are currently preparing for a major life event say their biggest challenge is not having enough money.
Only 40% of pre-retirees—those between five and 10 years away from their desired retirement age—say they are financially preparing for retirement. Additionally, half of pre-retirees think they will retire later than expected, and 22% think they may never be able to retire. Generation X pre-retirees report doubts as they approach their retirement years, with only a quarter believing they will retire on time.
“No two journeys through life are the same. But one thing is certain: we all experience major life events, both planned and unplanned, and those events come with financial impacts,” said Jessica Ruggles, corporate vice president of Financial Wellness at New York Life. “Preparedness is key. Our data shows that working with a financial professional helps people feel more prepared and can lead to better financial outcomes: 53% of people who work with a financial professional felt financially prepared for their major life events, versus 33% of those who don’t. Thirty-one percent of people who work with financial professionals report facing no challenges when preparing for their life events, versus only 17% of people who don’t. Navigating competing priorities and tradeoffs, along with increased longevity, creates a dynamic environment. However, financial emergencies are frequent, leaving many Americans vulnerable to life’s unexpected events.”
Life events like marriage, launching a business, or becoming a caregiver for an aging loved one are significant moments to assess finances. However, the majority of Americans say they are not actively planning for these critical milestones
American adults who experienced the following life events report on average feeling very prepared for purchasing a home (45%), getting married (43%), growing their family (35%), and starting a business (34%); and least likely to feel very prepared for divorcing or separating (18%), losing a loved one (15%), falling ill and requiring medical care (14%), and being impacted by layoffs (12%). Retirement falls into the middle, at 30%.
Financial preparedness and sources of support by generation:
“We tend to overestimate our chances of positive experiences and underestimate our chances of negative ones, leading to a disconnect between our financial expectations and realities. While we plan for things to go the expected way, unexpected events are common. For example, falling ill may happen suddenly, but someone age 65 or older has an almost 70% chance of needing long-term care, according to 2020 figures from the Administration for Community Living,” said Ruggles. “The typical retirement preparation often happens too late and is individualistic in approach, meaning planning and decision-making are thrust upon the individual, rather than an employer or financial professional providing support early and often. This points to the importance of having a relationship with a financial professional who can help set realistic expectations as well as create long-term financial strategies that include sufficient emergency savings, investments designed for longer durations, income protection solutions, and opportunities to fund things we enjoy doing. The importance of personalized, professional guidance becomes even clearer as we see more people turning to social media and online searches, which broadens access to financial education, but also leaves people at risk of receiving inaccurate advice.”
Americans nearing retirement report concerns they will have to delay retirement, and want more information to help them prepare
Rising longevity and declining financial confidence of Gen Xers result in plans to retire later or not at all. However, across all income levels, 18% of the Gen X cohort report having successfully retired
“The potential for people to live longer has implications for the workplace, retirement, and health planning. Gen Xers, the oldest of whom are now eligible to take retirement withdrawals, are in a more financially precarious position compared to other segments, likely due to sacrifices to their own financial security to provide care, which strains all areas of wellbeing. Our data shows that there are pathways for building retirement confidence. Among adults in this generation who are retired, two-thirds reported saving the amount that they wanted or more before retiring because they had a financial strategy. Access to human advice and personalized guidance remains paramount in helping individuals prepare for a more secure retirement without fear of outliving their assets,” said Ruggles.
ABOUT WEALTH WATCH
Wealth Watch is a recurring survey from New York Life that tracks Americans’ financial goals, progress toward those goals, and feelings about their ability to secure their financial futures, identifying key themes and trends that are emerging about topics like retirement planning, the role of protection-oriented solutions and the importance of financial guidance.
SURVEY METHODOLOGY
This survey was fielded between August 9 – 11, 2024 among a sample of 2,230 adults, with a 1,001 Gen X oversample which includes only those who were born between 1965-1980. The interviews were conducted online and the data were weighted to approximate a target sample of adults based on gender, age, race, educational attainment, and region. Results from the full survey have a margin of error of plus or minus 2-3 percentage points.
ABOUT NEW YORK LIFE
New York Life Insurance Company (www.newyorklife.com), a Fortune 100 company founded in 1845, is the largest mutual life insurance company in the United States1 and one of the largest life insurers in the world. Headquartered in New York City, New York Life’s family of companies offers life insurance, disability income insurance, retirement income, investments, and long-term care insurance. New York Life has the highest financial strength ratings currently awarded to any U.S. life insurer from all four of the major credit rating agencies.2
1 Based on revenue as reported by "Fortune 500 ranked within Industries, Insurance: Life, Health (Mutual)," Fortune magazine, 6/4/24. For methodology, see https://fortune.com/franchise-list-page/fortune-500-methodology-2024/
2 Individual independent rating agency commentary as of 11/17/2023: A.M. Best (A++), Fitch (AAA), Moody’s Investors Service (Aaa), Standard & Poor’s (AA+).
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Sara Sefcovic
New York Life Insurance Company
(212) 576-4499
Sara_M_Sefcovic@newyorklife.com