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While having enough money saved for Retirement is narrowly behind buying a home, more than a third of Americans don’t expect they’ll ever be able to retire, according to a survey released Tuesday from LendEDU.com.
Retirement saving was cited by 19% of 1,000 respondents, versus 20% prioritizing “buying my own house or apartment.” Paying off credit-card debt was cited by 14% and building an emergency fund by 10%.
While there was only a minor lack of confidence about paying off credit cards and building an emergency fund, 17% don’t believe they’ll ever become homeowners and but almost four in ten Americas (39%) don’t believe they’ll ever be able retire.
Of those doubting their ability to retire, 52% were over age 54, 30% were between 45 and 54, and 15% were 35 to 44.
As for emergency savings, 33% said a major bill resulting from an injury would destroy their savings and therefore their long-term financial goals; another 14% cited some form of debt that could quickly get out of hand. However, 28% felt “relatively secure” and did not believe their financial goals could be derailed.
Secondary priorities
After home ownership and retirement, the most cited financial priorities were some form of getting out of debt: 14% cited paying off credit-card debt, 7% paying off student-loan debt, and 4% cited paying off other forms of debt apart from credit cards or student loans. 6% answered “Building my credit score,” 5% wanted enough saved to move out of their parents’ homes and rent a home or apartment, 4% said “Buying a car,” and 3% wanted to start a business.
1% wanted to invest in real estate, another 1% wanted to buy a second home and yet another 1% wanted to buy a second or third car. 3% want to “create a retirement account” and 2% want to “invest in the market outside my retirement account.”
Money a bigger priority than Love?
Of the 37% who were not currently in a long-term relationship, 72% were more focused on their financial targets, versus a minority 23% who prioritized finding a romantic partner. (The rest preferred not to say). The survey sees this as a “glass half full” finding: “It is good that Americans are quite serious when it comes to realizing their personal finance goals. But, on the glass empty side, sometimes one’s finances can’t buy happiness, or in this case love, and it is always important to understand what is truly important in life.”
How Financial Goals vary by Generation
When it came to financial goals, there were some noticeable differences when broken down by which of the following generations respondents belonged to: silent generation & baby boomers, Generation Xers, millennials, and post-millennials.
The generations were filtered as per the latest update from the Pew Research Center. Members of the silent generation (1928-1945) were lumped in with baby boomers because so few members of the former participated in the survey.
As the generations got younger, respondents became less concerned with credit-card debt, likely because expenses grow over time. Conversely, poll participants became more concerned with student loan debt as they got younger. This can be attributed to both the cost of higher education rapidly increasing for younger generations (hence higher student debt balances) and also because older respondents have had more time to pay off their student debt.
Age allows a consumer to develop a more realistic sense of their financial ambitions. As the generations moved from post-millennial to the silent generation and baby boomers, the percentage of consumers who didn’t believe they would hit their financial goal consistently increased. In fact, 93% believe that one day they will achieve their financial goals, whether it took less than a year or more than 20 years.
Asked how “realistically” respondents thought it would take to complete the specified goal, the most common response — cited by 47% — was “1 to 5 years.” Next most cited, by 17%, was “6 to 10 years.” 3% said “more than 20 years” and 7% said that realistically, they never expected to attain the specified goal.
Of those citing more than 15 years, when asked by it would take that long to achieve the specified goal, 19% said debt repayments commanded most of their income at the moment, 37% said expenses were too high and they don’t earn enough to do other things, 11% said they don’t have enough credit or good enough credit, and 11% said they made too little at their job and felt it would take a long time to get a significant raise or promotion. 3% said their consumer confidence was simply too low and 19% cited other reasons not listed.
All the data in the report derives from an online survey of 1,000 adult Americans aged 18 and up during the first half of May 2019. It was commissioned by LendEDU and conducted online by polling company Pollfish.
