BOSTON--(BUSINESS WIRE)--Edelman Financial Engines (EFE), a top independent wealth planning1 and workplace2 investment advisory firm, today released the findings from its most recent Everyday Wealth in America3 report. For the third year, the report explores key issues at the intersection of life and money, including those that may pose the biggest challenges to achieving financial security.
“In our third year of conducting this research, we’re once again noticing that many Americans – even the affluent – aren’t feeling overly confident about the state of their finances. Part of these worries stem from external pressures, like inflation or a turbulent election environment, while some are individual pressures, such as family responsibilities and mounting credit card debt,” noted Amin Dabit, SVP, Head of Wealth Planning at Edelman Financial Engines. “Through this research, we’re learning more about how these different factors all come together to impact the way Americans perceive and achieve their wealth. The insights we gain allow us to better help our clients plan and work toward their financial goals.”
Key findings from the 2024 report include the following:
A majority need a six-figure income to avoid worrying about their living expenses. According to the research, only 12% of Americans this year consider themselves wealthy, which remained more or less in line with the past two studies. Persistent economic pressures continue to raise the bar on what Americans believe they need to stop worrying about everyday living expenses:
- 58% of Americans say an annual income of at least $100K is necessary to not worry about everyday living expenses, while one quarter (25%) believe more than $200K is required.
- When asked if they would prefer five healthy years added to their life or an extra $1M in their retirement savings, more than half (51%) said they would take the money.
- Credit card debt continues to pose the biggest threat to building wealth, which was consistent with the 2023 findings. Of the 93% of Americans who have credit cards, half (49%) reported carrying over debt each month, and one-in-five (21%) are holding $20K or more.
Half of homeowners under 50 years old feel trapped in their current home. Larger economic pressures continue to impact major purchasing decisions, and homebuying is no exception. Many cited how higher interest rates have made homebuying and moving seem impossible.
- Two-in-five (41%) Americans and well over half (56%) of those in their 30s say they’d be willing to move to another state if it meant saving on housing expenses.
- Meanwhile, one quarter (25%) say concerns about finances mean that they aren’t able to live where they want, and one-in-five (21%) believe they can’t afford to buy the house they want.
Gen X is feeling “more sandwiched” due to dual family financial strains. In a shift for parents everywhere, pressures from the current economic environment are making an empty nest feel more and more like a distant dream. In fact, only 24% of Americans believe their adult children will be independent by age 21. Coupled with caregiving responsibilities for aging parents, many Gen Xers are left feeling more sandwiched as they juggle financial obligations caring for both their children and their parents.
- One-fifth (20%) of Americans are actively engaged in caregiving for parents or adult family members; and more than one-third (37%) cited increased financial strain as a result.
- More than four-in-ten (42%) are providing support to their adult children in 2024.
- While only a third (32%) believe children should be out of the house by age 21, that number increases to 78% for children at age 25, with 70% saying they should be financially independent.
Retirees are hoping for more active golden years and expect their money to afford that lifestyle. Things might look a bit different for future retirees, as more than one-third (37%) want their retirement to be different than the generations before them.
- A significant number hope their retirement will include more activity (42%) or adventure (39%).
- This new vision of retirement, however, also requires Americans to rethink how they’ll plan for it. While two-thirds (65%) are at least somewhat confident they’ll be able to afford retirement, nearly one-third (32%) fear that they’ll never be able to “fully” retire.
Concerns about politics are top of mind for Americans. Perhaps no surprise, in an election year that is as contentious as ever, a significant majority (86%) say that the political environment has joined inflation (also 86%) as a top stressor impacting Americans’ perception of their own financial well-being.
- Nearly one quarter (22%) have made financial decisions in anticipation of or in response to an election, with one-in-ten (10%) doing so this year.
More Americans are turning to financial planners for support with retirement planning. Misperceptions impact whether people engage with a financial professional, with many believing they need more assets than they have before getting help.
- The good news is that for those who work with a financial planner, a clear majority (74%) say they stress less about their money issues.
- For those who don’t currently have professional help, getting support with retirement income planning (38%) and building a broader financial plan (34%) are top areas of interest.
“Whether it’s buying a home, managing family responsibilities, worrying about the current political landscape, or dreaming of a distant retirement, many important money decisions we face are not just financial choices – they’re deeply personal life choices,” added Dabit. “This research reinforces how a financial professional can support you through this complex and daunting process, helping to address the big issues today while planning for tomorrow’s goals.”
For more insights, access the complete Everyday Wealth in America 2024 report.
About Edelman Financial Engines
Since 1986, Edelman Financial Engines has been committed to always acting in the best interests of our clients. We were founded on the belief that all investors – not just the wealthy – deserve access to personal, comprehensive financial planning and investment advice. Today, we are America’s top independent financial planning and investment advisory firm, recognized by Barron's1 with 143+ offices4 across the country and entrusted by 1.3 million clients to manage more than $288 billion in assets.5 Our unique approach to serving clients combines our advanced methodology and proprietary technology with the attention of a dedicated personal financial planner. Every client’s situation and goals are unique, and the powerful fusion of high-tech and high touch allows Edelman Financial Engines to deliver the personal plan and financial confidence that everyone deserves. For more information, please visit EdelmanFinancialEngines.com.
1. The Barron’s 2024 Top 100 RIA Firms list, a ninth-year ranking of independent advisory firms, is qualitative and quantitative, including assets managed by the firms, technology spending, staff diversity, succession planning and other metrics. Firms elect to participate but do not pay to be included in the ranking. Ranking awarded each September based on data within a 12-month period. Investor experience and returns are not considered.
2. According to the Cerulli Associates Top-Nine Managed Account Sponsors by DC Assets survey of Defined Contribution managed account providers, The Cerulli Edge – U.S. Retirement Edition, 1Q 2024, Issue #70, Edelman Financial Engines is the largest managed account provider by DC assets and market share as of Dec. 31, 2023.
3. The 2024 Everyday Wealth in America research was conducted for Edelman Financial Engines by Greenwald Research. Information was gathered through an online survey from June 12 to July 3, 2024, of 3,008 Americans who were at least 30 years old. The total sample also includes an oversample of 1,500 affluent Americans between 45 and 70 of age, with household assets between $500K and $3M, and who are open to or currently working with a financial professional. Data is weighted to correct for the oversample and is also weighted by household assets, age, gender, race, and education to reflect the broader national population. If this study were a random survey, it would have a margin of error (at the 95% confidence level), of plus or minus 1.8 percentage points. References to year-over-year comparison or prior results represent comparisons to the 2022 and 2023 Everyday Wealth in America studies. The 2023 study surveyed 2,022 Americans from Aug. 28 to Sept. 8, 2023. The 2022 study surveyed 2,011 Americans from Aug. 30 to Sept. 7, 2022.
4. Edelman Financial Engines data, as of June 30, 2024.
5. Edelman Financial Engines data, as of June 30, 2024.
© 2024 Edelman Financial Engines, LLC. Edelman Financial Engines® is a registered trademark of Edelman Financial Engines, LLC. All advisory services provided by Financial Engines Advisors L.L.C., a federally registered investment advisor. Results are not guaranteed. AM3851591.
