Recent behavior has been fueled by fears of long-term financial uncertainty and rising health care costs. Two-thirds of workers are very concerned about their long-term financial future, slightly less than in fourth quarter of 2009 (71 percent). Nearly the same percentage of retirees (64 percent) is very concerned about their long-term financial future; up significantly from fourth quarter 2009 (56 percent).
More than half of Americans (55 percent of workers and 54 percent of retirees) think health care reform will have a direct impact on their personal health insurance costs. Of those who think they will be impacted, the vast majority of both retirees (86 percent) and workers (82 percent) believe their costs will go up.
“Americans’ confidence was shaken by the economy, but they haven’t given up,” said Luke Vandermillen, vice president of retirement and investor services at the Principal Financial Group®. “As some indicators show things may be turning around, Americans are taking responsibility and beginning to plan a new future by getting their finances back on track.”
The Principal Financial Well-Being Index, which surveys both American workers at growing businesses with 10 to 1,000 workers and retired Americans, is released quarterly by the Principal Financial Group and is conducted online by Harris Interactive®.
With extra cash from tax refunds and bonuses, Americans will pay off debt or build up nest egg
According to the survey, 77 percent of workers and 42 percent of retirees expect to receive a tax refund this year. Workers’ plans for their tax refund include paying down or paying off short-term debts (44 percent) or saving or investing the refund (41 percent). Half of retirees plan to save or invest their refund, a significant jump from the same period last year (33 percent). Nearly another quarter of retirees (23 percent) plan to pay down or pay off short-term debts.
One out five workers received a corporate bonus for 2009, a significant decrease from this same period in 2008 (28 percent). The bonus was most often saved or invested – selected by more than a third (38 percent) of workers – a significant increase from this same period in 2008 (29 percent).
“It’s encouraging to see that instead of spending extra cash, this year Americans are rebuilding their portfolios by paying off debt, saving or investing,” Vandermillen said.
Other key findings include:
Americans don’t want to go it alone for financial planning
- Forty-eight percent of retirees and 34 percent of workers said a third-party professional (certified financial planner, bank or financial institution, accountant, benefit provider or financial services company, stock broker, insurance agent or attorney) would be the person they would go to first for financial advice.
- Three out of four workers said they would definitely or possibly use a financial planning service if their employer offered it.
Despite fears, Americans aren’t protecting themselves
- Three-fourths of workers rated the emotional impact of becoming disabled and not being able to work for a living as at least an eight on a 10 point scale in which a 10 means “devastated.”
- Nearly half (49 percent) of workers don’t own or plan to buy disability insurance in the next year and say instead they plan to rely on their family, disability insurance from their employer or savings in the event of a disability.
