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Money, Insurance & Investments for Seniors
Senior Citizens Not Worried about Money as Nation's
Savings Drop to New Low
Pew survey finds seniors have enough money and not
worried
 January 26, 2007 - At a time when the personal
savings rate in this country has fallen into negative territory for the
first time in modern history, more than three-quarters (77%) of all
Americans describe themselves as the kind of person who "always looks
for ways to save money." But, don't include senior citizens, they are by
far the least likely to ever worry about money.
Older Americans (those ages 65 and above) are much
more likely than the rest of the adult population to say they save and
invest enough. Also, they're less likely to say they worry about money,
or that they spend more than they can afford.
As for the rest of the adult population,
difficulties with low savings rates are widely shared by virtually all
income and demographic groups. Among people under age 65, majorities of
high income adults as well as lower income adults say they don't save
enough. So do majorities of men as well as women; whites as well as
blacks and Hispanics; married people as well as singles, the employed as
well as the unemployed; and college graduates as well as those with less
education.
The findings are from a nationwide Pew Research
Center telephone survey conducted from October 18 through November 9,
2006 among a nationally representative sample of 2000 adults; it has a
margin of sampling error of plus or minus 2.5 percentage points.
 The analysis by Pew researchers continues:
"These concerns are borne out by government data.
The U.S. Commerce Department's Bureau of Economic Analysis has estimated
that, since April of 2005, the American public has been spending more
money than it has earned after taxes--an unprecedented development in
the past half century.1 As recently as the early 1980s, Americans on
average had been saving more than 10 percent of their after tax
earnings.
"Also, the Federal Reserve System reports that
total household debt has risen sharply in the past decade, due largely
to increases in mortgage debt.2
"However, despite both the negative savings rates
and the growth in household debt, the median financial wealth of
families has continued to rise, due mainly to increases in the value of
peoples' homes and/or their stock holdings.3 Indeed, economists have
argued that this "wealth effect" may at least partly explain today's
historically low savings rates. As people have seen value of their
assets grow, this theory goes, they may feel more freedom to spend and
less need to save.
"The Pew survey offers little more than marginal
support for this hypothesis. It finds that about half of all homeowners
(46%) say that the value of their home has increased "a lot" in recent
years. In their saving and spending habits, this group does differ a bit
from the rest of the population.
"They are a bit less likely to say they often or
sometimes spend more than they can afford (27% versus 35% among other
homeowners and 47% among renters). They also report a slightly lower
propensity to worry about money. But they're no different from the rest
of the population in their inclination in their description of
themselves as the kind of person who is always looking for ways to save.
"Similarly, respondents who are market investors
worry less about money than do those who don't have any such financial
investments. They're also more likely to say they save and invest
enough, and they're less likely to say they spend more than they can
afford. It should be noted, however, that market investors are also more
likely to have high incomes, and having a high income also correlates
independently with these same saving and spending characteristics.
Below are some of the charts showing how the
attitudes of senior citizens compare with younger generations.
|
Boomers are slightly more likely to
describe themselves as "savers" but this is probably because
seniors are not worried about saving. |
Half of seniors say they are saving
and investing enough, much more than younger generations. |
 |
 |
|
One fourth of senior citizens never
worry about money - leave that to the youngsters. |
Retirees are most comfortable with
their financial situation. |
 |
 |
>>
For the full report from the Pew Research Center,
click here.
Download the complete report for topline results
About the Pew Social Trends Reports
The Pew social trends reports explore the behaviors
and attitudes of Americans in key realms of their lives - family,
community, health, finance, work and leisure. Reports analyze changes
over time in social behaviors and probe for differences and similarities
between key sub-groups in the population.
The surveys are conducted by the Pew Research
Center, a nonpartisan "fact tank" that provides information on the
issues, attitudes and trends shaping America and the world.
Survey reports are the result of the collaborative
effort of the social trends staff, which consists of Paul Taylor,
Executive Vice President, Cary Funk, Senior Researcher and April Clark,
Research Associate
Related Reports from the Pew Research Center
Most Americans Moderately Upbeat About Family Finances in 2007.
January 2007. Pew Research Center.
Luxury or Necessity?: Things We Can't Live Without: The List Has Grown
in the Past Decade. December 2006. Pew Research Center.
As Home Prices Cool Down, Homeowners Temper Their Optimism. December
2006. Pew Research Center.
Online Banking 2006: Surfing to the Bank. June 2006. Pew Internet &
American Life Project.
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