Expectations for a comfortable retirement have dampened a bit, according to the latest “EY Financial Wellness Assessment,” still many working-age Americans remain positive about their finances. The study, published by Ernst & Young LLP’s Employee Financial Wellness services, reports the self-described behavior and confidence of U.S. working adults. Fielded from May through July, it is the firm’s third set of such numbers since the inaugural assessment in February. The purpose of the studies is to help employees assess their own financial health based on the responses, EY says.
Overall, the retirement picture for the 3,000-plus respondents, most of whom work for large corporations or nonprofits, was mixed. Forty-three percent said they are confident they’ll be on track for a comfortable retirement, 8% less than in February. Six percent contribute nothing to a retirement savings plan such as a 401(k), 403(b) or other type of workplace plan; 14% contribute 3% or less.
Less than half have crunched the numbers to gauge their retirement readiness: Forty-five percent said that, within the past year, they had estimated what they will need once they retire. As many as 37% of workers over 50, though, have yet to perform that task, the study says. Forty-one percent of younger Millennials, 18 through 25, have at least started thinking about planning for that time.
NEXT: Happy with their finances?
Of all the groups surveyed, employees closest to retirement, those 50 through 64, were the most satisfied with their personal finances—assets, savings and debt, EY says. Fifty-eight percent claimed satisfaction vs. 46% of respondents overall. Thirty-eight percent of 18- to 25-year-olds said they were dissatisfied with their current financial situation, leaving 62% at a minimum somewhat satisfied.
“Satisfaction” could reflect the fact that almost 77% overall—up 4% since February—said their current debt was manageable, while 7% said they had no debt at all. Of the most satisfied group, 80% said they could manage their debt. Of the young Millennials—a group recently out of college—62% said the same.
Manageable debt could also explain why a similar number—close to 73% of respondents—have never paid a bill late. When asked how often in the past year they had overshot a bill’s due date, 20% had done so once or twice. That number was a little higher—30%—for 25- through 36-year-olds.
NEXT: In case of emergency …
Eighty-eight percent were confident they could access $2,000 within the next month, if necessary, to cover an emergency expense. Almost 100% of those 65 and over said they could come up with that amount, and 76% of 18- through 25-year-olds said they could also. Fifty-seven percent overall believed they could maintain their minimum standard of living if they had to leave the work force for six months, due to medical issues.
Of the employees who consistently use credit cards, 62% said they pay the balance in full each month—down from 66% in February; almost 30% pay more than the minimum due, vs. 25% in February; the remaining 6% of working credit card users pay just the minimum.
Ernst & Young LLP’s Employee Financial Services practice (EFS) is a provider of independent employee financial education and counseling. EY is a global provider of assurance, tax, transaction and advisory services. Ernst & Young LLP is a member firm of EY, serving clients in the U.S.