MILWAUKEE, April 21, 2015 /PRNewswire/ -- A deep disconnect
exists between what Americans know they should do financially and
what they actually end up doing, according to the 2015
Northwestern Mutual Planning & Progress Study. Across
wide-ranging issues – from short-term saving, spending and
investing choices to long-term planning and protection strategies –
people across the nation recognize an urgent need to improve their
finances, and even have the right instincts about what steps to
take. But they fall short – well-short, in fact – on
follow-through.
This is the latest set of findings from the 2015 Northwestern
Mutual Planning & Progress Study, an annual research
project commissioned by Northwestern Mutual that explores
Americans' attitudes and behaviors toward finances and
planning. The research was conducted in January among over
5,000 U.S. adults aged 18 and older.
The study revealed the following about the discrepancy between
people's intentions and their actions:
- 58% of Americans believe their financial planning needs
improvement, and 21% are "not at all confident" they'll be able to
reach their financial goals; but when asked what steps they have
taken to plan for their financial futures, 34% said none.
- 67% of adults expect more financial crises such as what we
experienced in 2008, yet only 38% are confident their financial
plans can withstand market cycles; and nearly one in four
(23%) do not believe their plans can weather economic ups and
downs.
- Two thirds (67%) consider themselves savers, yet over half
(54%) say they have equal or more debt than savings.
- Despite serious concerns about retirement, 2 in 5 Americans
(43%) have not spoken to anyone about retirement planning.
"Intending one thing and doing another is human, but it's an
impulse we should all fight hard to resist," said Rebekah Barsch, vice president of planning and
sales at Northwestern Mutual. "How many of us know we should
eat better and exercise more, but fail to take action? It's
similar with finances. We know it's important, but we excuse
ourselves – consciously or not – because it's not easy. Of
course, intentions only get us so far. And when the stakes
are high, it's taking action that's critical."
An Uptick in Non-Planners
More than anything else, Americans fear the unknown and
unexpected. When asked about their greatest financial fears,
"an unplanned financial emergency" was far and away the No.1
choice. Interestingly, an unplanned financial emergency was
the No. 2 factor that would prompt people who believe their
financial planning needs improvement to actually take steps to
improve. The No. 1 factor was "a cash windfall."
But unfortunately, the research shows that the number of
Americans who do no planning at all is going up:
- Over the last four years, the number of Americans age 25 and
older who identify themselves as "non-planners" and having no
established financial goals has doubled from 7% in 2012 to 14% in
2015.
"Some people might instinctively know they need to address their
financial futures, but fear gets the better of them, and they
ignore the issue, hoping it works itself out one way or another,"
said Barsch. "We tell them the best remedy for fearing and
ignoring is planning, preparing and protecting."
Deterioration of Financial Responsibility by
Generation
Whether justified or not, there is a sense across all age groups
that financial responsibility is getting worse over time.
The 2015 Northwestern Mutual Planning & Progress
Study found the following believe their generation is less
financially responsible than their parents'/ grandparents':
- 61% of Millennials (aged 18-34)
- 56% of Gen X (aged 35-49)
- 51% of Boomers (aged 50-68)
- 36% of Matures (69+)
Meanwhile, the following believe their generation is more
financially responsible than their parents'/ grandparents':
- 15% of Millennials
- 14% of Gen X
- 18% of Boomers
- 34% of Matures
"This probably says more about how people view their own
behaviors versus evidence that there's a real deterioration in
financial responsibility across generations," notes Barsch.
"To a certain degree, it's healthy to recognize the need to
improve, but people may be over-reacting a bit here. We've
actually seen some rather consistent signals that Millennials, for
example, are setting a pretty high bar for financial
responsibility."
About the Research
The 2015 Northwestern Mutual Planning & Progress
Study explores the state of financial planning in America
today, and provides unique insights into people's current attitudes
and behaviors toward money, goal-setting and priorities.
This study was conducted by Harris Poll on behalf of
Northwestern Mutual and included 5,474 American adults aged 18 or
older who participated in an online survey between January 12, 2015 and January 30, 2015. Results were weighted to
Census targets for education, age/gender, race/ethnicity, region
and household income. Propensity score weighting was also
used to adjust for respondents' propensity to be online. No
estimates of theoretical sampling error can be calculated; a full
methodology is available.
About Northwestern Mutual
Northwestern Mutual has been helping families and
businesses achieve financial security for nearly 160 years. Our
financial representatives build relationships with clients through
a distinctive planning approach that integrates risk management
with wealth accumulation, preservation and distribution. With
$230 billion in assets, $27
billion in revenues, nearly $90 billion in assets
under management in our investment products and services, and more
than $1.5 trillion worth of life insurance protection in
force, Northwestern Mutual delivers financial security to 4.3
million people who rely on us for insurance and investment
solutions, including life, disability income and long-term care
insurance; annuities; trust services; mutual funds; and investment
advisory products and services. Northwestern Mutual is recognized
by FORTUNE magazine as one of the "World's Most Admired" life
insurance companies in 2015.
Northwestern Mutual is the marketing name for The Northwestern
Mutual Life Insurance Company, Milwaukee, WI, and its
subsidiaries. Northwestern Mutual and its subsidiaries offer a
comprehensive approach to financial security solutions including:
life insurance, long-term care insurance, disability income
insurance, annuities, Iife insurance with long-term care benefits,
investment products, and advisory products and services.
Subsidiaries include Northwestern Mutual Investment Services, LLC,
broker-dealer, registered investment adviser, member FINRA and
SIPC; the Northwestern Mutual Wealth Management Company, limited
purpose federal savings bank; and Northwestern Long Term Care
Insurance Company.
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