February 25, 2009
Fewer Americans believe they are saving enough for retirement and expect to pay off their home mortgage before retirement, according to the second annual America Saves Week survey.
At the same time, though, the survey found that far more Americans are concerned about the impact of the current recession on their personal finances with over half "very concerned."
"The goal of the week is to persuade thousands of organizations to encourage millions of Americans to assess their financial condition and take action to improve it," said Dallas Salisbury, Chairman of the American Savings Education Council and President of the Employee Benefit Research Institute. "The America Saves Week website provides useful tools for this assessment and action," he added.
Comparing the data collected by the 2008 and 2009 February surveys reveals some of the effects of the current recession on consumers:
• The proportion of respondents who indicated they are saving enough for retirement declined from 52 percent to 49 percent. And the proportion that said they are saving for retirement in workplace
programs fell from 55 percent to 51 percent.• The proportion of mortgage holders who said they expect to pay off their mortgage before retirement fell from 76 percent to 74 percent. And the proportion of all Americans who said they own property and either have no mortgage debt or are paying down this debt declined from 67 percent to 62 percent.
• The proportion of respondents who said they do not spend all their income and save the difference fell slightly from 74 percent to 73 percent. And the proportion saying they have "sufficient emergency savings to pay for unexpected expenses like car repairs or a doctor visit" rose slightly from 71 percent to 72 percent.
"For most Americans, to date recession-related financial concerns have been greater than financial losses," noted Stephen Brobeck, Consumer Federation of America Executive Director and a leader in America Saves. "But tens of millions who still have their jobs and have suffered little or no loss of retirement savings worry that a deepening recession will eventually cost them income or even their jobs," he added.
Americans can better prepare for an uncertain financial future by understanding their financial condition, developing realistic spending and savings plans, and saving automatically. Unfortunately, only about half the country have taken these prudent financial measures:
• Little more than half of respondents know their net worth, the same percentage as last year.
• Three-fifths have a savings plan with goals, but less than half have a "spending plan that allows you to save enough money to achieve the goals of your savings plan." These percentages are down a little from those last year, 62 percent and 49 percent, respectively.
• Less than half of respondents save automatically, outside of work, through regular preauthorized transfers from checking to savings or investments. This percentage of "automatic savers" did not change from last year.
• The good news is that more consumers are making an effort to pay down and pay off consumer debt. The proportion that said they are reducing this debt rose from 38 percent in 2008 to 44 percent this year. And the proportion saying they are now consumer "debt-free" rose slightly from 39 percent to 40 percent.
"Research shows that those who plan borrow less and save more," said Brobeck. "And anyone, regardless of income, can develop useful spending and savings plans," he said.
