Financial wellness is really a matter of financial priorities
With this in mind, more than six in ten respondents said protecting their financial assets (63%) and planning uncertainties (62%) are more important to them today than they were before the pandemic. Almost half (45%) believe these shifts will last for a long time, whatever the case in terms of broad economic recovery. According to Ameriprise, a majority of respondents (63%) said their household incomes were not significantly affected by the pandemic, and 10% said their income had actually increased. However, a quarter (25%) said they made less money, with many in this group seeing significant income losses.
“While the economic impact of the pandemic has hit people across the country unevenly, this has been a wake-up call for everyone,” said Marcy Keckler, vice president of financial advisory strategy at Ameriprise in Minneapolis. “The exceptional circumstances of the past year have convinced many people, including those already on solid financial footing, to take action that they may have previously postponed. Investors pay closer attention to their finances and make important changes to strengthen their financial position. “Even as the labor market changes, employee confidence in their ability to live comfortably in retirement remains high overall,” said Craig Copeland, senior research associate at EBRI. “While resilience may be the buzzword for 2021, three in ten workers say the pandemic has negatively affected their ability to save for retirement due to reduced working hours, income or job changes. The group most likely to have their ability to save compromised were those who historically had low levels of confidence; B. those on low incomes who are not married and have a problem with debt. “
EBRI and Greenwald find that 18% of workers reported having cut their working hours and / or their salary since February 1, 2020, while 10% had been on leave or made temporary dismissals. Overall, 39% of employees stated that their household had seen a negative change in job or income since February 1, 2020. On the other hand, 21% of employees said they saw a positive change in work over the same period. The Ameriprise study shows that nearly half (45%) of respondents cut their spending during the pandemic and 30% expect them to be more frugal with their money in the future. At the other end of the spectrum, a quarter made large ticket purchases or, for example, invested in a major home renovation. Once the pandemic ends, a quarter of investors expect to spend more than usual on activities they have had to postpone. It is also noteworthy that 30% of survey participants who did not have a counselor before the pandemic have worked with one because of COVID-19 or will soon do so.
Related data from the 2021 Retirement Confidence Survey conducted by the Employee Benefit Research Institute (EBRI) and Greenwald Research shows that 80% of retirees are confident of being able to live comfortably during retirement. This is actually due to the 76% of retirees who have held this view over the past year. Contradicting signals?
New Perspectives After the Pandemic “A finance professional can play an important role in helping investors assess the long-term effects of their shifting priorities,” says Keckler. “The advice of a qualified professional can help you navigate the twists and turns of life and stay on track to meet your greatest financial goals for the future.”
“COVID-19 has caused financial setbacks for so many Americans, but people are changing their behavior and financial decisions to make them directly,” said Christian Mitchell, executive vice president and chief customer officer for Northwestern Mutual in Milwaukee. “While we don’t know what life will be like after COVID, we are encouraged to see that people intend to stick with the better financial habits they have developed during this challenging time.” The study notes that the pandemic and related events have led people to be proactive in planning. Almost one in five (17%) U.S. adults aged 18 and over said they didn’t have a financial plan before the pandemic, but now they do. Overall, 83% of people were asked to create, reconsider, or adjust their financial plan during the pandemic. Data from the Northwestern Mutual “2021 Planning and Progress Study” – an annual research that examines American attitudes and behaviors about money, financial decisions, and broader economic problems – shows that one-third (32%) of Americans say that their financial discipline actually improved during the pandemic. In this group, 95% expect their newfound habits to persist after the health crisis subsides.
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