Personal Finance Concerns Outweigh Health Concerns
Many American workers and retirees plan to reduce holiday spending this year in response to ongoing financial worries, according to a new study by a global financial group.
The Principal Financial Well-Being Index report, which surveyed 1,121 employees from small to mid-size companies and 533 retirees over 59 years old, found that financial stress outweighs health concerns, with the poor economy and fears about personal finances in particular causing the greatest worries.
Among retirees, 52 percent reported high stress levels over the economy, with 33 percent of them expressing concerns over their ability to save and 63% responding that they are 'very concerned' about their financial future. In contrast, less than 20 percent of both retirees and employees reported concern about their health.
This Year's Holiday Spending Isn't The Biggest Financial Concern
Meanwhile, seven out of ten workers expressed great concern over their long-term financial future, with over a quarter of them not having any established retirement savings plans. Roughly 30 percent of the workers stated that their jobs are highly stressful, and 42 percent of them indicated a high stress level about the economy.
In light of the persistent economic fears, one-third of employees and almost half of retirees expect to spend less on Christmas gifts and will buy for fewer people this year. Most plan to pay for their holiday expenses via credit cards, cash or debit cards, paying off their bills on time to avoid fees and interest costs. Over half of both groups surveyed noted that such costs will cause 'moderate' stress on their personal finances this year.
When asked about their economic outlook for 2012, the greatest concerns included gas prices, health care costs, economic uncertainty, food prices, and increased taxes. Most do not feel improvement in their financial situations from the beginning of the year, though a third of all those surveyed expressed varying degrees of confidence about being able to reach their financial dreams in the future. Such dreams included hopes of being financially secure now and in retirement, and becoming debt free.
While just over half of the retirees thought the economy would deteriorate further in 2012, a significantly fewer amount of workers agreed. Compared to last quarter when 46 percent of them indicated such an outlook, this time only 39 percent expressed such negative predictions.
Paying Off Credit Is Also An Issue
Looking forward to the New Year, employees stated plans to increase monthly savings and payoff credit cards as their top resolutions for 2012. One out of five wants to reduce monthly spending as well. Such New Year's resolutions may arise from prior reports that not having saved enough in the past year was the greatest financial blunder of 2011, with increasing debt following closely behind.
The survey was conducted online by Harris Interactive for the Principal Financial Group, as a quarterly report to examine changes in the workforce in companies of up to 1,000 employees. Participants were questioned on October 20-31, 2011, with the data used to compile this quarterly study for Principal.
Principal has been conducting the index survey since 2000, offering financial services to companies and individuals including retirement, insurance and investment products.
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Date of original publication: April 02, 2013