board of governors of the federal reserve system selected findings from the survey of household...
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Board of Governors of the Federal Reserve System
Selected Findings from the Survey of Household Economics and Decisionmaking
Dave BuchholzFederal Reserve Board
Seventh Annual Financial Literacy Leadership ConferenceSeptember 29, 2014
My comments today represent my own views. They do not necessarily represent the views of the Federal Reserve Board of Governors or its staff.
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Full report available at federalreserve.gov
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Major survey topics
• Household Economic Well-Being• Housing and Living Arrangements• Credit Behavior and Access to credit• Savings• Education, Student Loans, and Job Readiness• Retirement Planning and Saving• Health Care Expenses
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Well-Being
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Household Economic Well-BeingWhich one of the following best describes how well you are managing financially these days?
Asked of all respondents. n = 4,134
"Finding it dif-ficult to get
by"13%
"Just getting by"25%"Doing okay"
37%
"Living com-fortably"
23%
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Which one of the following best describes how well you are managing financially these days?
Finding it very difficult to get by
Just getting by Doing okay Living comfortably0
10
20
30
40
50
26
35
30
9
13
31
38
17
9
23
42
26
4
16
50
31
2
10
38
49
Less than $25,000 $25,000-$49,999 $50,000-$74,999 $75,000-$99,999 $100,000 and greater
Perc
ent o
f Inc
ome
Gro
up
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Compared to five years ago (2008), would you say that you (and your family living with you) are better off, the same or worse off financially?
Worse off About the same Better off0
5
10
15
20
25
30
35
40
45
50
45
34
20
3735
27
3432
34
26
33
41
19
36
45
Less than $25,000 $25,000-$49,999 $50,000-$74,999 $75,000-$99,999 $100,000 and greater
Perc
ent o
f Inc
ome
Gro
up
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Saving
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None 1 to 5 6 to 10 11 to 15 16 to 20 21 to 25 25+0
10
20
30
40
50
60
70
80
Less than $25,000 $25,000-$49,999 $50,000-$74,999$75,000-$99,999 $100,000 and greater
Percent of Income Saved
Perc
ent o
f Inc
ome
Grou
p
In 2012, about how much of your income did your household set aside as savings as a percent of your total gross household income (before taxes and deductions)?
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Reasons for Saving
Asked of those who reported saving a positive portion of their income. n=2,270
“Which of the following categories, if any, are you saving money for? “
Other
Trust or charitable donation
Home purchase
Taxes
Education
Major appliance
Your children
Pay off debts
Just to save
Unexpected expenses
Retirement
0 10 20 30 40 50 60 70
5%
11%
13%
15%
18%
20%
21%
27%
49%
53%
58%
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If you were to lose your main source of income (e.g. job, government benefits), could you cover your expenses for 3 months by borrowing money,
using savings, selling assets, or borrowing from friends/family?
Those responding “Yes”
Less than $25,000 $25,000-$49,999 $50,000-$74,999 $75,000-$99,999 $100,000 and greater0
10
20
30
40
50
60
70
80
90
32
52
70 70
84
Perc
ent o
f Inc
ome
Gro
up
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Ability to cover $400 expense
Asked of all respondents. n = 4,134
Suppose that you have an emergency expense that costs $400. Based on your current financial situation how would you pay for this expense?
Among the 33% of respondents who could pay but would use some form of debt or sell something(respondents can choose multiple options) %
Credit card – paid off over time 49
Borrow from friends or family 27
Sell something 20
Use a bank loan 9
Use a payday loan 8
Other 6
Use cash or credit card paid in full (in combination with one or more forms of debt or sales) 27
Pay us-ing
debt or by sell-
ing some-thing33%
Could not pay (alone or in combination)
19%
Pay us-ing
cash or credit card
paid in full
(exclu-sively)48%
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Before 2008, did you or your household have any savings, including stocks, money in a savings account, or pensions?
No Yes Don’t know0
10
20
30
40
50
60
70
80
90
100
45
37
17
30
63
7
20
73
7
16
78
78
88
3
Less than $25,000 $25,000-$49,999 $50,000-$74,999 $75,000-$99,999 $100,000 and greater
Perc
ent o
f Inc
ome
Gro
up
n=4,134
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Of those who had had savings: “Since 2008, have you or your household had to use up some, nearly all, or all of your savings to pay for bills and
expenses?”
No Yes, some Yes, nearly all Yes, all0
10
20
30
40
50
60
70
2728
18
2729
35
1719
4038
13
9
47
34
107
63
27
64
Less than $25,000 $25,000-$49,999 $50,000-$74,999 $75,000-$99,999 $100,000 and greater
Perc
ent o
f Inc
ome
Gro
up
n=2,845
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Retirement
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Retirement planning by age
Asked of those not currently retired. n=3,163
18-29 30-44 45-59 60+0
5
10
15
20
25
30
35
40
4541
2119 20
2726
20 1918
2625
19
8
16
20 21
5
10
16
21
None at all A little Some A fair amount A lot
Perc
ent
How much thought have you given to the financial planning for your retirement?
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Retirement planning by income
Asked of those not currently retired. n=3,163
None at all A little Some A fair amount A lot0
5
10
15
20
25
30
35
40
45
50
44
21
18
97
24 2527
14
9
15
32
2219
1214
2728
19
12
9
20
24 25
22
Less than $25,000 $25,000-$49,999 $50,000-$74,999 $75,000-$99,999 $100,000 and greater
Perc
ent o
f Inc
ome
Gro
up
How much thought have you given to the financial planning for your retirement?
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RetirementWhich one of the following best describes your plan for retirement?
18-29 %
30-44 %
45-59 %
60+ %
Total %
I do not plan to retire 5 6 8 3 6
Work fewer hours as I get close to retirement 14 10 6 14 10
Retire from my current career, but then find a different full-time job 5 4 4 0 4
Retire from my current career, but then find a different part-time job 15 13 18 17 16
Retire from my current career, but then work for myself 10 11 10 6 10
Work full time until I retire, then stop working altogether 35 29 22 15 25
Keep working as long as possible 16 22 21 28 21
Other 1 4 10 16 7
Asked of those not currently retired who have given at least “some” thought to retirement. n=1,766
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Retirement savings types, by age
Asked of those not currently retired. n=3,163
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Have no retirement savings or pension:
Less than $25,000 $25,000-$49,999 $50,000-$74,999 $75,000-$99,999 $100,000 and greater0
10
20
30
40
50
60
54
32
18
1310
Perc
ent o
f Inc
ome
Gro
up
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Retirement and the Great Recession
Compared to your retirement plans before 2008, would you say that you now plan to retire…
Age45-59 60+ All Respondents
% % %
Plan to retire earlier 5 6 5Plan to retire at the same age 34 27 33Plan to retire later 41 41 36Didn’t think about retirement prior to 2008 19 25 24
Among those not retired who had given at least “some” thought to retirement:
Asked of those not currently retired who have given at least “some” thought to retirement. n=1,766
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Not Just Lack of Retirement Savings
(Just Broke?)
Of those who report no retirement savings or pension:– 67% also said they didn’t regularly put money into
savings account (vs. 47% overall)– 86% didn’t have 3 months’ rainy-day funds
(vs. 58% overall)
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Overall Financial Challenges
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Self-described financial challenges
“In a sentence or two, please describe the main financial challenges or concerns facing you or your family?”
• 1,616 respondents indicated that they currently had none
• 2,265 provided a written response
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Top Issues
25
Self-described financial challenges
Among those who offered a response. n = 2,265
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In a sentence or two, please describe the main financial challenges or concerns facing you or your family?
26
Total Responses: 2,265