Adults contributing $730 to debt repayment each month
1 in 3 adults who have invested money have made changes to their investment portfolio in the past six months
NEW YORK, November 09, 2022–(BUSINESS WIRE)–As inflation continues to pose challenges for the financial strategies of American adults, New York Life’s latest Wealth Watch survey found that people are coping by adjusting debt management and strategies investment, although the financial orientations guiding these strategy adjustments vary according to the generational cohort. The latest survey found more than half of adults said they expect their living expenses to be higher in the second half of 2022 than in the first, and 61% of respondents agree they are more worried than ever. for their financial future.
“Consumers continue to struggle with inflation and how to factor rising prices into their budgets and long-term financial strategies – so the question is how to manage these costs while simultaneously creating opportunities to strengthen savings and investments in order to keep pace with inflation and achieve financial goals,” said Dylan Huang, senior vice president and head of retirement and wealth management solutions at New York Life.
Although inflation creates uncertainty, most adults are able to manage their debt, but feel that debt is getting in the way of their financial goals
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66% of adults say they are currently in debt, with credit cards (46%), mortgages/homes (23%) and auto debt (22%) being the most common.
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Millennials and Generation X are more likely to report being in debt than other generations (73% and 71% respectively).
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Currently, adults contribute an average of $732.91 per month to pay off their debts.
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Overall, people in debt are more likely to view their debt as preventing them from achieving their financial goals and they are more nervous about paying their debts in the current environment.
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When it comes to debt management, a quarter (25%) of adults feel less able to manage debt compared to their peers.
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Nearly 1 in 3 (28%) people with debt say they are contributing less each month to repaying a loan/debt than a year ago; those who contribute less each month towards their debt/loan payment contribute $297.63 less per month.
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Gen Xers (31%), Millennials (28%) and women (29%) are the most likely to feel less able to manage their debt than their peers.
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36% of adults have taken on more debt due to changes in interest rates and nearly 9 in 10 adults (89%) who have taken on more debt due to changes in interest rates say it has an impact on their long-term financial plans.
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Market changes and inflation also impact Americans’ investment strategies
“Given the current macro environment, with high inflation and recessionary headwinds looming, people are wondering how they can leverage their investments to stay on track with their financial goals. It’s easy to react to market conditions, but these changes may not ultimately be aligned with a long-term financial strategy,” Huang said.
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3 in 10 (30%) adults who have invested money have made changes to their investment portfolio in the past six months.
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Of those who made changes to their investment portfolio, 37% moved more money to cash, followed by individual stocks (26%) and cryptocurrency (21%).
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Adults who said they had made changes to their investment portfolio in the past six months said they decided to do so because of a reaction to the stock market (35%), an increase/decrease in the level of risk investment (33%) and the cost of goods/services are rising due to inflation (28%) – but just over two in five (41%) feel confident in their decision.
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When it comes to the stock market, more than two in five adults (41%) who currently invest in the stock market say they have stopped investing in the past six months.
“For younger retirees, these markets can be difficult to navigate as higher interest rates have had negative impacts on traditionally safe assets, such as bonds,” Huang continued. “But the silver lining is that higher rates have allowed insured asset classes like annuities to offer higher guarantees, and a mix of insured and traditional asset classes can help people cope with a wider range of economic environments.”
Financial advice that helps inform these decisions varies across generations
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When it comes to financial advice and sources of economic information, individuals look primarily to family (31%), news sources (e.g. CNN, Fox News) (23%) and financial advisors (22%).
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Those who have invested money are most likely to turn to financial advisors (37%) for financial advice, while Gen Z is the generation most likely to turn to social media (40%) .
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When it comes to the most influential type of advice, adults are most likely to act on the advice or guidance of a financial advisor (33%) or family member (29% ).
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Social media is an influential source of financial information for younger generations, with 25% of Gen Zers and 20% of Millennials saying they would act on the advice/guidance they got received from this channel.
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“As younger generations increasingly turn to digital tools or social media when seeking financial advice, advice from a trusted financial professional still plays an important role, especially for those investing in the market,” Huang said. “A challenging macroeconomic environment impacts everyone differently based on their unique financial situation, but the human guidance of a finance professional is essential to weather any market climate and stay on track with financial goals ahead. long term.”
ABOUT WEALTH WATCH
Wealth Watch is a recurring New York Life survey that will track Americans’ financial goals, progress toward those goals, and their feelings about their ability to secure their financial future, identifying key themes and trends emerging on topics such as retirement planning, the role of protection-oriented solutions and the importance of financial orientation.
SURVEY METHODOLOGY
This survey was conducted between October 13 and 15, 2022 with a national sample of 4,400 adults. Interviews were conducted online and data was weighted to approximate a target sample of adults based on gender, education level, age, race and region. The full survey results have a margin of error of plus or minus 2 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. Based in New York, the New York Life family of companies offers life insurance, retirement income, investments and long-term care insurance. New York Life has the highest financial strength ratings currently assigned to any U.S. life insurer by the four major credit rating agencies2.
1 Based on earnings as reported by “Fortune 500 Ranked Industries, Insurance: Life, Health (Mutual)”, Fortune magazine, 05/23/2022. For the methodology, please see https://fortune.com/fortune500/.
2 Individual comments from independent rating agencies as of 10/18/2022: AM Best (A++), Fitch (AAA), Moody’s Investors Service (Aaa), Standard & Poor’s (AA+).
See the source version on businesswire.com: https://www.businesswire.com/news/home/20221109005376/en/
contacts
Sara Sefcovic
New York Life Insurance Company
(212) 576-4499
[email protected]
Lauren Nussbaum
Sloane & Company
818-426-3201
[email protected]