AARP Study Highlights Financial Woes Across Generations

According to the latest AARP Financial Security Trends Survey, more young Americans are feeling optimistic about the future of their finances. Unfortunately, it’s not all plain sailing – as the older generation’s worries are piling up.

Financial Outlook for Americans

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New survey results from AARP are painting a unique picture of American society.

Rising Optimism

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Optimism is up in people 30 and over, as 41% of people feel as though their finances will get better in the next 12 months, compared with 39% last year and 36% in 2022.

Widespread Financial Insecurity

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Unfortunately, beyond that optimism, the survey’s results indicate that people of all generations are struggling to remain financially secure and, in some cases, to retire with enough money.

Men’s Financial Worries

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Men are feeling less secure about their money now compared to last year. 42% of guys aged 30 and older rate their financial situation as “only fair” or “poor,” up from 34% before.

A Focus on Basic Expenses

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They are more worried about basic expenses, with 40% expressing concern compared to 33% in 2023.

Economic Issues

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Also, more men are dealing with credit card debt (43% compared to 38% last year) and struggling to save for emergencies and retirement. Only 62% of guys had emergency savings, down from 69%, and of those saving for retirement, only 28% were saving 10% or more of their income – down from 35% last year.

Inflation and Saving Challenges

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AARP explains that this may be because economic issues like inflation have made saving for the future harder, putting more pressure on men as they get closer to retirement age.

Men vs. Women

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Despite men feeling less secure about their finances lately, they still seem to be in a better spot than women overall.

Emergency Savings

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According to the survey more men have emergency savings compared to women – 62% of men compared to 58% for women. Men also worry less about managing debt than women do (42% of men compared to 47% of women), and they tend to see their debt as more manageable.

Retirement Savings

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When it comes to retirement savings, men are ahead too. Around 40% of guys who are saving for retirement believe they are putting away enough money to have a secure retirement, while only about 30% of women feel the same way.

Financial Security by Income and Relationship Status

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It may not come as a surprise to some, but among people aged 30 and up, those with lower incomes and those not in relationships – which help lower the costs of bills – constantly feel less financially secure compared to other people over 30.

Challenges Faced by Lower-Income Individuals

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It’s tough for them because they have less money to save for retirement and for emergencies, and they often have a lot of debt.

Retirement Savings Concerns

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Elsewhere, the survey found that only around one out of three adults who are saving for retirement think they will have enough cash to be secure if they keep saving at their current rate.

Current Rate Not Enough

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More people, especially those 50 and older, are starting to worry they won’t have enough money saved up for retirement.

Lack of Savings for Many

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About one in four people aged over 50 reported not having any retirement savings at all, while 73% were concerned about inflation causing prices to rise faster than their income – roughly the same as in 2023.

AARP’s Analysis

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AARP’s senior vice president of research, Indira Venkateswaran, had this to say about the survey’s findings, “Far too many people lack access to retirement savings options, and this, coupled with higher prices, is making it increasingly hard for people to choose when to retire.”

Top Barrier to Retirement Savings

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“Everyday expenses continue to be the top barrier to saving more for retirement, and some older Americans say that they never expect to retire.”

Survey Details

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AARP’s survey was undertaken from January 3 to January 29, 2024, and involved 8,368 adults aged 30 and above from all 50 states and the District of Columbia.

The Reality of Retirement

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As retirement seems more of a pipe dream for many of the older generation, experts are predicting that older workers will stay in the workforce for a longer period.

Longevity in the Workforce

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This is, as AARP policy advisor David John explains, because they “don’t have sufficient retirement savings. It’s a problem, and it’s likely to continue as we go forward.”

The post AARP Study Highlights Financial Woes Across Generations – first appeared on Liberty & Wealth.

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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.

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