Financial Anxiety is Prevalent Among Americans, Even Affluents

by Lydia Saad

Retirement savings is top concern, but tied with college expenses as parents' top worry

GALLUP NEWS SERVICE

PRINCETON, NJ -- Whether or not money buys happiness is widely debated, but whether or not money buys financial peace of mind would seem to be a more straightforward matter. Not so according to Gallup's annual Personal Finance poll, updated Apr. 2-5, 2007, in which Americans were asked to rate the amount of concern they have about each of several financial problems. To be sure, people's degree of financial anxiety is directly related to their household income. However, an index of seven of the financial items updated this year shows that almost two-thirds of those who are in Gallup's top-income category still worry about at least one of the issues examined in the poll.

A majority of respondents in each of the top two income brackets studied express concern about no more than two financial worries. This pattern shifts among those in the $30,000-to-$49,999 income bracket, where the majority of respondents have three or more worries. The percentage with three or more worries jumps substantially, to 74%, among those in the lowest income bracket.

Number of Financial Issues "Very/Moderately" Worried About*
By Household Income
April, 2-5, 2007

$75,000+

$50,000-$74,999

$30,000-$49,999

$20,000-$29,999

Less than $20,000

%

%

%

%

%

3-7 worries

27

40

53

58

74

1-2 worries

36

33

23

19

17

0 worries

37

27

24

23

9

*Index includes all items measured in 2007 except for worry about paying college expenses

Retirement is Top Concern

Of the eight specific items rated in this year's poll, "not having enough money for retirement" generates the most concern. Even a majority of Americans in upper-income households say they are very or moderately worried about their retirement income. The prospect of paying for medical costs in the case of a serious illness or accident also ranks high among the public. Of slightly lesser concern, but still a worry for at least one-third of Americans, are paying medical costs for normal healthcare, covering a child's college expenses, and being able to pay one's normal monthly bills. Less worrisome are being able to pay housing costs such as rent or mortgage, or making the minimum monthly payment on credit cards.

Next, please tell me how concerned you are right now about each of the following financial matters, based on your current financial situation -- are you very worried, moderately worried, not too worried, or not worried at all? If a particular item does not apply to you, please say so.


Total
Worried

Total
Not Worried

%

%

Not having enough money for retirement

56

42

Not being able to pay medical costs of a serious illness/accident

49

50

Not being able to maintain the standard of living you enjoy

41

58

Not being able to pay medical costs for normal healthcare

36

61

Not having enough money to pay for your children's college

34

26

Not having enough to pay your normal monthly bills

33

66

Not being able to pay your rent, mortgage, or other housing costs

26

69

Not being able to make the minimum payments on your credit cards

18

64

Gallup has tracked public anxiety about all but one of these financial issues (paying for college) each year since 2001. Across that period, concern levels have been fairly steady, except for last year when concern was a bit higher for meeting monthly bills, maintaining ones standard of living, and covering medical expenses for a serious illness or injury. This year, concern for these items reverted back to levels more typical of previous years.

Percentage "Very/Moderately" Worried About Expenses in Each Area
by Year

2000

2002

2003

2004

2005

2006

2007

%

%

%

%

%

%

%

Retirement

53

54

54

52

60

60

56

Serious illness/accident

50

45

46

47

52

54

49

Standard of living

43

35

38

39

41

49

41

Normal healthcare

44

35

37

37

42

45

36

College expenses

--

--

--

--

--

--

34

Normal monthly bills

32

30

30

32

30

38

33

Housing costs

24

22

25

24

23

27

26

Credit card payments

18

15

16

17

16

17

18





















Concern about paying college expenses -- new to the list this year -- is fairly modest among the general pubic: just 34% of all Americans say they are very or moderately worried about this. However, for adults with children under age 18, it essentially ties with saving for retirement as their top concern. There are no significant differences between parents and non-parents on any other financial issues.

Percentage "Very/Moderately" Worried About Each Issue
By Parental Status
Apr. 2-5, 2007

Children under 18

No children under 18

%

%

College expenses

68

17

Retirement

63

52

Serious illness/accident

45

50

Standard of living

40

42

Normal healthcare

33

37

Normal monthly bills

28

34

Housing costs

26

26

Credit card payments

19

17

One's stage of life is also a factor in terms of other financial worries.

  • Middle-aged Americans (those 35- to 64-years-old) shoulder the most anxiety when it comes to saving for retirement, paying medical bills, and maintaining their standard of living.
  • With nearly half of young adults reporting they have a child under 18, and more than one-third of middle-aged adults in the same position, it is not surprising that these two groups are the most concerned about meeting college expenses.
  • Young adults are also the most concerned about making the minimum payments on their credit cards.
  • Although paying rent, mortgage, or other housing expenses is a relatively low concern for all groups, it is more common among 18- to 34-year-olds and 35- to 64-year-olds than with those 65 and older.
  • Middle-aged adults -- who tend to have greater health problems than younger Americans and, unlike seniors, are not yet covered by Medicare -- are the most concerned about paying medical expenses.

 In fact, seniors are uniformly the least worried of any age group on all of these issues.

Percentage "Very/Moderately" Worried About Each Issue
by Age
Apr. 2-5, 2007

18- to 34-year-olds

35- to 64-year-olds

65 years old or older

%

%

%

Retirement

55

65

32

Serious illness/accident

42

55

39

Standard of living

38

47

30

Normal healthcare

28

42

29

College expenses

49

38

7

Normal monthly bills

29

36

27

Housing costs

29

29

14

Credit card payments

24

18

11

Does Money Buy Peace of Mind?

Naturally, one's financial means strongly influence his or her degree of personal worry about money issues. Those in upper-income households can afford to worry a lot less than others about most of the items measured.

Compared with high-income Americans, low-income Americans worry a lot more about paying their normal monthly bills (58% vs. 15%), meeting their housing costs (46% vs. 9%), and making minimum payments on credit cards (32% vs. 6%). These are the areas that set upper- and lower-income Americans most apart financially.

Adults living in low-income households are also about twice as likely as those living in high income households to worry about maintaining their standard of living (59% vs. 28%) and paying normal healthcare costs (50% vs. 21%).

However, money does not present an absolute barrier to widespread financial anxiety, particularly when it comes to retirement, paying for a serious illness or accident, or meeting college expenses. About half of upper-income Americans worry about having enough money in retirement, while nearly 4 in 10 worry about paying bills for a serious illness. The two income level groups express the same degree of worry about meeting college expenses.

Percentage "Very/Moderately" Worried About Each Issue
by Income
Apr. 2-5, 2007

Less than $30,000

$30,000-$74,999

$75,000 or More

%

%

%

Retirement

67

56

48

Serious illness/accident

60

51

38

Standard of living

59

43

28

Normal healthcare

50

40

21

College expenses

33

37

34

Normal monthly bills

58

31

15

Housing costs

46

25

9

Credit card payments

32

19

6

Retirement Worries Start Young

Americans are reported to have a negative savings rate (they spend more than they earn) and most aren't saving nearly enough for their retirement. However, this is not to say Americans aren't concerned about their retirement savings, even at a young age. Using a combined dataset from the 2005, 2006, and 2007 Gallup Personal Finance surveys, the following table indicates the percentages of various age groups saying they are very or moderately worried about having enough money for retirement.

While fewer than half of the youngest adults -- 18- to 24-year-olds -- are generally concerned about retirement savings (44% say they are very or moderately worried), this quickly changes. A majority of those in their upper 20s are concerned, not much different than those in their 30s.

Anxiety about retirement savings appears to taper off in the early 60s, however not until retirement age (65 years old) does the percentage of respondents saying they are very or moderately worried again fall below 50%.

Worry About Retirement
by Detailed Age
(average for 2005-2007)

Very Worried

Moderately Worried

Total Worried

%

%

%

18- to 24-year-olds

25

19

44

24- to 29-year-olds

28

33

61

30- to 34-year-olds

29

40

69

35- to 39-year-olds

30

32

62

40- to 44-year-olds

32

33

65

45- to 49-year-olds

33

34

67

50- to 54-year-olds

33

36

69

55- to 59-year-olds

29

32

61

60- to 64-year-olds

21

33

54

65- to 69-year-olds

17

17

34

70 years old or older

10

20

30

Survey Methods

Results are based on telephone interviews with 1,008 national adults, aged 18 and older, conducted Apr. 2-5, 2007. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±3 percentage points. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

23. Next, please tell me how concerned you are right now about each of the following financial matters, based on your current financial situation -- are you very worried, moderately worried, not too worried, or not worried at all. If a particular item does not apply to you, please say so. First, how worried are you about … How about -- [ITEMS A-G ROTATED, ITEM H READ LAST]?

2007 Apr 2-5
(sorted by "total worried")

Very worried

Moderately worried

Total
Worried

Total
Not worried

%

%

%

%

Not having enough money for retirement

27

29

56

42

Not being able to pay medical costs of a serious illness/accident

28

21

49

50

Not being able to maintain the standard of living you enjoy

18

23

41

58

Not being able to pay medical costs for normal healthcare

21

15

36

61

Not having enough money to pay for your children's college

18

16

34

26

Not having enough to pay your normal monthly bills

14

19

33

66

Not being able to pay your rent, mortgage or other housing costs

11

15

26

69

Not being able to make the minimum payments on your credit cards

9

9

18

64

A. Not being able to pay medical costs for normal healthcare


Very
worried

Mod-erately worried


Not too worried

Not worried
at all

DOESN'T
APPLY
(vol.)


No
opinion

%

%

%

%

%

%

2007 Apr 2-5

21

15

31

30

3

1

2006 Apr 10-13

23

22

26

27

2

*

2005 Apr 4-7

23

19

24

32

2

*

2004 Apr 5-8

21

16

24

36

3

*

2003 Apr 7-9

17

20

24

36

3

*

2002 Apr 8-11

18

17

26

36

2

1

2001 Apr 6-8

22

22

24

31

1

--

* Less than 0.5%

B. Not being able to pay medical costs in the event of a serious illness or accident


Very
worried

Moderately worried


Not too worried

Not worried
at all

DOESN'T
APPLY
(vol.)


No
opinion

%

%

%

%

%

%

2007 Apr 2-5

28

21

27

23

2

*

2006 Apr 10-13

33

21

21

22

2

1

2005 Apr 4-7

30

22

25

22

1

*

2004 Apr 5-8

26

21

24

27

2

*

2003 Apr 7-9

24

22

23

29

2

--

2002 Apr 8-11

21

24

25

28

1

1

2001 Apr 6-8

27

23

24

25

1

*

* Less than 0.5%

C. Not being able to pay your rent, mortgage or other housing costs


Very
worried

Moderately worried


Not too worried

Not worried
at all

DOESN'T
APPLY
(vol.)


No
opinion

%

%

%

%

%

%

2007 Apr 2-5

11

15

31

38

5

1

2006 Apr 10-13

11

16

29

37

7

1

2005 Apr 4-7

10

13

30

43

4

*

2004 Apr 5-8

11

13

26

42

7

1

2003 Apr 7-9

11

14

27

43

5

*

2002 Apr 8-11

8

14

26

47

4

1

2001 Apr 6-8

10

14

28

44

4

*

* Less than 0.5%

D. Not being able to maintain the standard of living you enjoy


Very
worried

Moderately worried


Not too worried

Not worried
at all

DOESN'T
APPLY
(vol.)


No
opinion

%

%

%

%

%

%

2007 Apr 2-5

18

23

32

26

1

1

2006 Apr 10-13

18

31

28

22

1

1

2005 Apr 4-7

14

27

31

28

*

*

2004 Apr 5-8

16

23

29

31

1

*

2003 Apr 7-9

14

24

32

29

1

*

2002 Apr 8-11

12

23

31

32

1

1

2001 Apr 6-8

16

27

30

26

1

*

* Less than 0.5%

E. Not being able to make the minimum payments on your credit cards


Very
worried

Moderately worried


Not too worried

Not worried
at all

DOESN'T
APPLY
(vol.)


No
opinion

%

%

%

%

%

%

2007 Apr 2-5

9

9

23

41

18

1

2006 Apr 10-13

9

8

24

41

17

1

2005 Apr 4-7

7

9

22

45

17

*

2004 Apr 5-8

7

10

22

46

15

*

2003 Apr 7-9

7

9

21

47

16

*

2002 Apr 8-11

7

8

21

48

15

1

2001 Apr 6-8

9

9

22

41

19

*

* Less than 0.5%

F. Not having enough money for retirement


Very
worried

Moderately worried


Not too worried

Not worried
at all

DOESN'T
APPLY
(vol.)


No
opinion

%

%

%

%

%

%

2007 Apr 2-5

27

29

24

18

3

*

2006 Apr 10-13

30

30

19

16

4

*

2005 Apr 4-7

30

30

18

19

2

1

2004 Apr 5-8

26

26

21

23

4

*

2003 Apr 7-9

24

30

22

20

4

*

2002 Apr 8-11

25

29

19

22

4

1

2001 Apr 6-8

24

29

24

19

4

*

* Less than 0.5%

G. Not having enough to pay your normal monthly bills


Very
worried

Moderately worried


Not too worried

Not worried
at all

DOESN'T
APPLY
(vol.)


No
opinion

%

%

%

%

%

%

2007 Apr 2-5

14

19

32

34

1

*

2006 Apr 10-13

14

24

30

30

1

*

2005 Apr 4-7

13

17

32

37

1

*

2004 Apr 5-8

12

20

28

39

1

*

2003 Apr 7-9

12

18

29

40

1

*

2002 Apr 8-11

11

19

27

42

1

*

2001 Apr 6-8

12

20

29

39

*

*

* Less than 0.5%

H. Not having enough money to pay for your children's college


Very
worried

Moderately worried


Not too worried

Not worried
at all

DOESN'T
APPLY
(vol.)


No
opinion

%

%

%

%

%

%

2007 Apr 2-5

18

16

10

16

40

*

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Gallup http://www.gallup.com/poll/27505/Financial-Anxiety-Prevalent-Among-Americans-Even-Affluents.aspx
Gallup World Headquarters, 901 F Street, Washington, D.C., 20001, U.S.A
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