A tale of contradictions

Americans report conflicting feelings about their financial health as spending and debt worries offset market, salary and employment gains.

The last two years have been immensely challenging. Against a backdrop of loss for so many, Americans have lived through the ebbs and flows of the pandemic, from the shock and disruption of the early lockdowns and emerging variants to the hope of reopening, vaccines and treatments.

In the midst of this uncertainty, Personal Asset conducted new research to understand what all of these dramatic turns have meant for the financial confidence of Americans. Unsurprisingly, Americans are reacting to these swings with contradicting feelings about their financial health. Rising markets have given people more confidence in their investment accounts and retirement savings. At the same time, fewer Americans are confident in the economy, their ability to meet financial goals or their overall financial state.

Financial health is waning

Despite the signs of economic growth and rising asset prices, many Americans lack confidence in the economy — as if they are waiting for the other shoe to drop. Just 40% of Americans report confidence in the U.S. economy in Q4 2021, down from nearly 70% before COVID hit in the first quarter of 2020.¹

Along with a drop in economic confidence, Americans’ feelings of financial health have also worsened in Q4 2021. Just 34% of Americans feel very financially healthy, a 14 percentage-point drop from Q1 of 2021. The number of Americans feeling very financially unhealthy nearly doubled during the same time period.

How financially healthy do you feel?

Sources: Personal Asset and Personal Capital, “Wealth and Wellness Survey,” November 2021. Personal Asset and Personal Capital, “Financial Well-being Survey,” April 2021.

Financial progress is slipping

Along with decreased feelings of financial health, fewer Americans have achieved major financial milestones than in the beginning of the year. Our research revealed significant drops in the percentage of Americans with an emergency fund or the ability to consistently save — as well as those who say they are debt free.

Employers and retirement plan providers: Creating a path through the uncertainty

Employers can play a key role in helping savers navigate this moment. Along with family and financial advisors, retirement savings plan providers are considered a top ally on the journey to financial health.

Employers may want to work with their retirement providers to target their employees’ top goals as they plan education and communication campaigns for the year. Going into 2022, Americans are focused on paying down debt, saving for retirement and building an emergency fund. Employers have an opportunity to help them reach these important markers of financial health.

Still optimistic

Despite the decline in achievement and growing concerns about financial health and the economy, most survey respondents are confident in their ability to eventually achieve savings goals, build emergency savings and plan for retirement.

Confidence in ability to achieve financial milestones

Sources: Personal Asset and Personal Capital, “Wealth and Wellness Survey," November 2021. Personal Asset and Personal Capital, “Back to Financial Basics," December 2020. Personal Asset , “Generational Research Survey," December 2019.

Employers can help. By tapping into savers’ optimism and providing them with planning resources, education and motivation, employers can help people navigate this moment of contradictions and concern and stay on a path to a better tomorrow.

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