AARPBuletinSurveyon PlanstoSpendStimulus PackageRebates. ExecutiveSummary

AARPBuletinSurveyon PlanstoSpendStimulus PackageRebates ExecutiveSummary March2008

AARP is a nonprofit, nonpartisan membership organization that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. AARP neither endorses candidates for public office nor makes political contributions. We produce AARP The Magazine, published bimonthly; AARP Bulletin, our monthly newspaper; AARP Segunda Juventud, our bimonthly magazine in Spanish and English; NRTA Live & Learn, our quarterly newsletter for 50+ educators; and our website, www.aarp.org. AARP Foundation is our affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. AARP collected the data for this project through a telephone survey administered by International Communications Research (ICR). This report was written by Gerard Rainville, Senior Research Advisor, AARP Strategic Issues Research. For additional information contact Gerard Rainville at GRainville@aarp.org.

The AARP Bulletin recently commissioned a nationwide survey to determine how people intended to use the rebates they receive from the Internal Revenue Service as part of the 2008 Economic Stimulus Package. The survey asked respondents if they intended to save or spend the money they received in the form of a tax rebate. The rebate amount received varied among respondents based on their tax-filing status. For those indicating an intention to spend at least some of their rebates, a follow-up question was asked to determine the type of goods the respondents intend to spend at least part of their rebates. The survey findings find that a minority of adults intend to spend the entirety of their rebates. However, a majority of adults intend to spend at least some of their rebates. A difference between those aged 18 to 49 and 50+ is noted in the intention to spend the entirety of their rebates. A greater percentage of those 50 and above intend to spend the entirety of their rebates. This brief summary report highlights some of the survey findings. Survey findings include: Of all those asked about their rebate plans, 61% intended to spend at least some of their rebates. Twenty-four percent of aged 18 or older intended to spend the entirety of their rebates. Thirty seven percent planned to spend some of the rebate and save the remainder. Twenty-seven percent of those asked were either ineligible for or uncertain about what they would do with their rebates. Twelve percent intended to save the entirety of their rebates. (see table 1). Among those eligible and with known intentions for their rebates, 84% intended to spend at least some their rebates. Thirty-three percent of these respondents intended to spend the entirety of their rebates. Fifty one percent planned to spend some of the rebate and save the remainder. Sixteen percent intended to save the entirety of their rebates. (see table 1). Among those eligible and with known intentions for their rebates, similarities and differences were noted between age groups. Forty one percent of those aged 50 or older and twenty nine percent of those between 18 and 49 intended to spend the entirety of their rebate. This difference is statistically significant. Eighty two percent of those aged 50 or older and eighty six percent of those between 18 and 49 intended to spend at least some of their rebate. Eighteen percent of those aged 50 or older and fourteen percent of those between 18 and 49 intended to save the entirety of their rebate (see table 1). ANOVA analyses indicated that there was no significant relationship between age groups in regard to their overall intentions for their rebates. Among those that will spend at least some of their rebates, personal necessities (such as food and clothing) receive the top ranking in terms of the items on which respondents intend to spend. After personal goods, those between 18 and 49 and those over 50+ have similar expenses, but slightly different spending priorities. Younger respondents rank housing expenses, paying down consumer debt and paying energy bills second, third and fourth, respectively. For those 50 and older, these rankings go to paying energy bills, housing expenses and AARP Bulletin Survey on Plans to Spend Stimulus Package Rebates Executive Summary (March 2008) 1

taking a vacation and/or dining out. Purchasing of the luxury goods ranked 7 th for both of the age groups (see table 2). Survey methodology The study was conducted for AARP via telephone by International Communications Research (ICR) using its national omnibus survey service. Interviews were conducted February 29 March 9, 2008 among a nationally representative sample of 1,235 respondents age 18 and older. ICR weighted the data to provide nationally representative estimates of the U.S. adult population 18 years of age and older. AARP Bulletin Survey on Plans to Spend Stimulus Package Rebates Executive Summary (March 2008) 2

AARP 2008 Rebate Bulletin Survey Detailed Data Tables Table 1: Rebate Status/Intentions of Sample Full sample Rebate-eligible/Known Plans Age Groups Total 18-49 50+ Total 18-49 50+ Spend All 24% 20% 31% 33% 29% 41% Spend some/save 37% 41% 31% 51% 57% 41% some Save all 12% 10% 13% 16% 14% 18% Not eligible for refund or no plans 27% 28% 25% N/A N/A N/A Table 2: Rankings of Goods/Services on which Respondents Intended to apply Rebate Good/Service Type Paying down consumer debt (such as credit cards, but not mortgage payments) Medical needs (such as prescription drugs, new eyeglasses, dental work) Personal necessities (such as food and clothing) Tuition (either your own or your family members ) Luxury goods (such as TVs, your hobbies, toward a new car) Energy bills (such as heating, gasoline) Rank and Percentage among 18-49 group Rank and Percentage among 50+ group 3 rd 49% 6 th 35% 6 th 36% 5 th 40% 1 st 70% 1 st 58% 8 th 28% 8 th 14% 7 th 34% 7 th 21% 4 th 47% 2 nd 46% Take a vacation/ dine out 5 th 45% 4 th 41% Housing expenses (such as rent, 2 nd 52% 3 rd 46% mortgage payments and home repairs) Other 9 th 9% 9 th 8% Note: Total percentages will exceed 100 because respondents rebates may be spent on multiple forms of goods/services. Some portion of the 50+ group receives reduced rebate amounts owing to their tax filing status. For this reason, percentages are comparable within age groups but not across. AARP Bulletin Survey on Plans to Spend Stimulus Package Rebates Executive Summary (March 2008) 3

AARP 2008 Rebate Bulletin Survey Annotated Questionnaire Congress has approved a $600 rebate for every taxpayer with up to $75,000 adjusted gross income and $300 for Social Security recipients with $3,000 or more in income. If you receive this rebate, do you plan to: SPEND ALL/SOME Spend some I don t qualify NET Spend all of it and save some Save all of it for the rebate Don t know Refused Percentages 61 24 37 12 21 6 1 (Asked of total respondents who plan to spend all/some of their rebate; n = 729) Do you plan to spend at least some of it on (INSERT)? Yes No Don t know Refused a. Paying down consumer debt (such as credit cards, but not 44 56 1 -- mortgage payments) b. Medical needs (such as prescription drugs, new eyeglasses, 37 62 1 -- dental work) c. Personal necessities (such as food and clothing) 65 34 1 -- d. Tuition (either your own or your family members ) 23 77 * * e. Luxury goods (such as TVs, your hobbies, toward a new car) 29 70 1 -- f. Energy bills (such as heating, gasoline) 47 53 1 -- g. Take a vacation/dine out 43 56 1 -- h. Housing expenses (such as rent, mortgage payments, and home repairs) 49 49 1 -- Do you plan to spend at least some of it on anything else? 3/9/08 Yes 8 Car maintenance (such as gas, tires) 2 Gifts to friends/family 2 Home improvement (such as new appliances, remodeling) 2 Pay down expenses (such as taxes, utility bills) 1 Other 2 No 88 Don t know 4 AARP Bulletin Survey on Plans to Spend Stimulus Package Rebates Executive Summary (March 2008) 4