S E P T E M B E R 2 0 1 7 MassMutual Middle America Financial Security Study
Background and Methodology Study Objectives To raise awareness of the threats and obstacles to middle-class workers financial security and highlights the workplace and retail products that can help this growing segment achieve their financial goals and prepare financially for the long-term. Survey of Middle Income Americans An online survey of Middle-Income Americans through Research Now s panel was conducted by Greenwald & Associates on behalf of MassMutual. The survey was conducted from February 28 to March 14, 2017. To qualify, respondents needed to be between the ages of 25 and 65, work full-time, have a household income between $35k and $150k, and have considerable influence when it comes to making financial and employee benefit decisions. An oversample of 513 Americans who identified themselves as was conducted. The data is weighted by race, age, and gender to reflect the composition of the United States middle class. Percentages in the tables and charts may not total to 100 due to rounding and/or missing categories. Of the 513 workers who participated in the survey, 75 currently make between $35k and $44k, 204 make between $45k and $74k, and 234 make between $75k and $150k. The margin of sampling error at the 95% confidence level is plus or minus 3.1%. 2
Key Findings Lower Levels of Financial Security workers are split when it comes how financially secure they feel, with nearly half describing themselves as not too or not at all financially secure. In addition, just over half say that having benefits through their employer makes them feel more secure. Three in ten report having less than $500 saved for emergencies. Severe emergencies would present real challenges to s across all income levels. While half feel they could manage a sudden expense of $500, nearly six in ten say an unexpected expense of $5,000 would cause significant discomfort or they wouldn t be able to get by. workers would also be more likely to struggle if they were out of work for one month or experienced an unexpected 2-day hospital stay. s Worry More Often workers worry about money or household finances more often than others, with more than half worrying about this at least once a week. While, like others, workers are most worried about politics and the direction of the country, they are also more likely than others to express concern about their household s financial situation and housing situation. In addition, workers are also more worried when it comes to the well-being of their parents and their own personal health. All of these worries about money are negatively impacting workers mental health and stress levels. However, these financial woes do not affect workers any more or less than they affect others. Desire for Help For s, unlike others, debt and bills/cost of living tie as the top issues facing their household. workers find it more difficult than others to manage their monthly finances and nine in ten attribute this difficulty to high levels of debt and not having enough money. When it comes to preparing for retirement, s feel behind, and, more so than others, wish their employer did more to educate them about saving for retirement. Large shares also don t understand how to properly save and invest for their situation, are unsure where to go to get financial advice and feel it is difficult to find financial services companies that know how to help households like their own. All that said, it is perhaps no surprise that workers would welcome additional financial help and guidance from their employer more so than others. In fact, workers show much more interest in employer-offered financial planning/counseling services, especially budgeting assistance and debt counseling. 3
s do not feel as financially secure as others. In fact, nearly half of workers feel insecure. Level of Financial Security 62% Of workers with incomes of $75k or more feel very or somewhat secure, compared to 47% with lower incomes. 54% 47% 26% 32% Net Not Secure Gen Pop 37% 46% 9% 7% 11% 14% Very financially secure Somewhat financially secure Not very financially secure Not at all financially secure How financially secure do you feel? ( n=1,010; n=513) 4
Half of workers say having employee benefits makes them feel more secure. 15% Of men say their employee benefits make them feel much more secure, compared to just 7% of women. How Employee Benefits Impact Financial Security 11% 11% 13% 12% 30% 58% More Secure 47% 35% 52% More Secure 40% Much more secure Somewhat more secure Much more secure Somewhat more secure A little more secure Not at all more secure A little more secure Not at all more secure Thinking about all of the benefits offered by your (and your spouse s/partner s) employer, w ould you say that having those benefits you do makes you feel? ( n=1,010; n=513) 5
workers worry more often than others about their finances, with over half worrying at least once a week. How Often You Worry About Money/Household Finances 100% 80% 15% 19% 8% 17% Almost never Less than once a month 60% 19% 20% Once or twice a month 40% 19% 20% Once a week 20% 16% 20% Multiple times a week 0% 13% 16% Daily How often do you w orry about money or your household s finances? ( n=1,010; n=513) 6
workers are more worried than others about their household s financial situation and personal health. Percent Extremely/Very Worried For Life Aspects Politics/direction of the country Household financial situation Health/well-being of parents Personal health Career Health/well-being of children Housing situation Marriage/love life 25% 22% 24% 66% 69% 54% 62% 51% 59% 40% 49% 37% 44% 34% 41% 36% From day to day, how w orried are you about each of the follow ing aspects of your life? ( n=1,010; n=513) 7
Among those who worry about money, nearly two in three report that it negatively affects their mental health or stress levels. Top Aspects Negatively Affected By Worrying About Money Your mental health/stress level 57% 64% Your social life and ability to do things with friends Your diet or ability to eat healthy Your marriage or romantic relationship The frequency or quality of your or your family's medical or dental care Relationship with parents, siblings, or other family 40% 42% 34% 36% 27% 28% 22% 21% 16% 20% Do w orries about money negatively affect any of the follow ing aspects of your life? Please select all that apply. Filter: If w orries at least once a w eek ( n=495; n=274) 8
More so than others, workers face problems with bills or cost of living, just as often as they face debt problems. Top Issues or Problems Facing Household s Finances and Financial Situation Debt 22% 22% Income/Job Bills/Cost of Living Healthcare costs, medical bills, illness (getting ill) 5% 18% 17% 14% 22% 11% women are more likely than men to say bills/cost of living is the biggest issue facing their household (28% vs. 18%). Lack of savings, not saving enough Planning for retirement: not saving enough, want a comfortable retirement 8% 9% 7% 4% What is the biggest issue or problem facing your household s finances and financial situation today? ( n=1, 010; n=513) 9
workers are less likely than others to have at least $5,000 set aside for emergencies (28% vs. 42%). Level of Savings for Financial Emergencies 13% 7% 5% 11% 15% 15% 16% 11% 17% 12% 6% 10% 19% 10% 12% 5% Virtually nothing <$500 $500 to $999 $1,000 to $1,999 $2,000 to $4,999 $5,000 to $9,999 $10,000 to $49,999 $50,000 or more How much do you have saved for financial emergencies? ( n=1,010; n=513) 10
Severe emergencies, like a large unexpected expense or being out of work, would be more challenging for workers. Degree of Challenge to Household Get by without much issue Get by, but there would be some financial discomfort Get by, but there would be significant discomfort and real cutback Would not be able to get by A sudden expense of $500 51% 63% 30% 24% 10% 3% 11% 8% You suffer a sudden Illness or injury that requires a 2-day hospital stay 46% 54% 26% 29% 14% 13% 13% 5% You lose your job and are out of work for 1 month 25% 35% 31% 34% 29% 22% 10% 15% A sudden large expense of $5,000 14% 23% 31% 32% 27% 25% 28% 20% You lose your job and are out of work for 6 months 13% 12% 23% 22% 28% 34% 39% 29% Please indicate the degree of challenge each w ould pose to your household if it w ere to occur tomorrow ( n=1,010; n=513) 11
workers find it more difficult than others to manage their monthly finances. Level of Difficulty Managing Household s Monthly Finances 23% 4% 26% difficult 20% 32% 5% 37% difficult 18% 53% 45% Very easy Somewhat easy Somewhat difficult Very difficult Very easy Somewhat easy Somewhat difficult Very difficult Do you find it easy or difficult to manage your household s monthly finances? ( n=1,010; n=513) 12
workers are more likely to cite time constraints and complexity as challenges to managing their finances. Reasons Managing Finances is Challenging Major reason Minor reason High levels of debt make monthly finances difficult to manage 53% 51% 34% 39% 86% 90% I don t always have enough money each month 48% 55% 37% 35% 85% 90% I don t feel I have the financial knowledge to properly manage my finances 15% 21% 39% 45% 55% 65% I generally find matters involving money or numbers difficult 12% 20% 39% 41% 51% 61% I don t have enough time to manage my household s finances well 14% 18% 34% 42% 48% 60% My household s finances are too complex for me to manage 10% 10% 30% 44% 39% 54% Are these major, minor, or not reasons w hy you find managing your finances challenging? Filter: If managing monthly finances is difficult ( n=275; n=175) 13
workers are especially likely to feel they are behind on saving for retirement and wish their employer did more to educate them. Agreement with Statements About Finances When it comes to preparing for retirement, I am behind where I need to be 63% 71% I wish my employer did more to educate me on saving for retirement I am worried that changes to the healthcare system could lead me or a family member to lose health insurance I struggle to make ends meet I don't understand how to save and invest appropriately for my situation 51% 63% 47% 60% 35% 43% 35% 49% 78% Of workers with incomes lower than $75k to feel behind when it comes to saving for retirement, compared to 63% of s with incomes of $75k or higher. Spending money to enjoy myself now is more important than saving for the future 27% 36% To w hat extent do you agree or disagree w ith the follow ing statements? ( n=1,010; n=513) 14
workers are more likely to be unsure about where to seek financial advice and have difficulty finding financial companies to help. 2 in 3 workers with incomes under $75k are unsure about whom to go to seek financial advice (67%), versus just 49% of those with higher incomes. Agreement with Statements About Getting Financial Help I feel that financial companies want to help people like me 51% 53% I'm unsure about whom to go to for financial advice or guidance 48% 59% It's difficult to find financial services companies that know how to help households like mine 40% 53% I have different financial planning needs than the average American household 33% 42% General Population 38% work with a financial professional 31% work with a financial professional 15
workers are more likely than others to welcome additional financial help from their employer. 3 in 4 workers with incomes under $45k would welcome additional financial help from their employer (75%), compared to 60% of those with higher incomes. Views on Help from Employer 54% 62% 46% 38% I would welcome additional financial help or guidance from my employer I don't think it's appropriate for my employer to be involved in my personal finances Which of the follow ing is closer to your view? ( n=1,010; n=513) 16
workers express much greater interest in financial planning or counseling services through their employer. Percent Somewhat/Very Interested in Financial Wellness Benefits Financial planning services 67% 79% Social Security counseling 59% 70% Budgeting assistance 49% 68% Tuition reimbursement Debt counseling Automatic bill paying 42% 39% 37% 54% 52% 61% College loan repayment 35% 47% How interested w ould you be in receiving the follow ing from your employer? ( n=1,010; n=513) 17
Study Demographics Gender General Population (n=1,010) (n=513) M ale 56% 59% Female 44 41 Age 25 to 34 27% 31% 35 to 44 25 30 45 to 54 26 24 55 to 65 22 15 *=<0.5% 18
Study Demographics *=<0.5% Are you of, Spanish, Latino origin or descent? General Population (n=1,010) (n=513) Yes 17% 100% No 83 -- Prefer not to answer * -- Racial Background Non- Caucasian 68% -- 17 100% Non- African-American 9 -- Non- Asian 5 -- Non- Other 1 -- Prefer not to answer 1 -- [If ] Were you (n=76) (n=513) I was born outside of the U.S. 20% 20% I was born in the U.S., and at least one of my parents was born outside of the U.S. I was born in the U.S., and both of my parents were born in the U.S. 32 34 44 46 Not sure -- -- Prefer not to say 4 1 19
Study Demographics Household Income General Population (n=1,010) (n=513) $35,000 to $44,999 10% 15% $45,000 to $54,999 12 16 $55,000 to $64,999 12 13 $65,000 to $74,999 8 11 $75,000 to $99,999 27 24 $100,000 to $149,999 30 22 M arital Status M arried 61% 54% Single, never married 19 20 Divorced or separated 10 10 Not married, but living with a partner/significant other 7 13 Widowed 2 2 Level of Education High school graduate or less 16% 19% Some college/trade or technical school 43 61 College graduate (4-year degree) 27 14 Graduate or professional degree 14 5 20
Study Demographics Current Employment Status General Population (n=1,010) (n=513) Employed full time 100% 100% [If married/partner] Spouse s/partner s Employment Status (n=618) (n=349) Employed full time 81% 81% Employed part time 6 3 A homemaker 5 6 Retired 3 3 Disabled and unable to work 2 2 Self-employed 2 2 Unemployed or temporarily laid off 1 2 A full-time student * 1 21
Study Demographics *=<0.5% Region General Population (n=1,010) (n=513) South 33% 33% M idwest 26 11 Northeast 21 16 West 20 40 Total Savings Less than $1,000 7% 13% $1,000 to $4,999 8 9 $5,000 to $9,999 7 10 $10,000 to $49,999 20 23 $50,000 to $99,999 18 18 $100,000 to $249,999 14 10 $250,000 to $499,999 10 6 $500,000 to $999,999 5 2 $1 million or more 2 * Not sure 2 3 Prefer not to say 7 7 22
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