- More were ‘doing OK’ or ‘living comfortably’ in Fed survey
- Income outlook soured, and stark socioeconomic contrasts show
A substantial share of Americans lacked retirement savings and fewer households were confident in the outlook for their income at the end of last year.
That’s according to a Federal Reserve report on the economic well-being of U.S. households in 2015, released Wednesday. The findings show that while respondents increasingly reported that they are “doing OK” or “living comfortably,” a smaller share said they expected income growth than in the prior year’s survey. Thirty-one percent of non-retired Americans said they had no retirement savings at all, unchanged from 2014.
At a time when presidential candidates including Donald Trump and Bernie Sanders have gained ground in part by appealing to a sense of disenfranchisement and disappointment, the findings paint a picture of Americans’ contrasting fortunes. While households have been facing improving economic prospects, the results show fewer are optimistic about the future. And though the educated are faring well, those who lack a bachelor’s degree or who shoulder student debt continue to struggle.
“Single parents, racial and ethnic minorities, and respondents with lower levels of income or education are all more likely to report that they were having some level of difficulty getting by financially,” the report said. “Economic advancement continues to be experienced to a greater degree for respondents in higher socio-economic circumstances.”
The report shows that among those with a bachelor’s degree or higher, more than twice as many respondents said they were better off financially from the prior year, compared with those who said they were worse off. For people with a high school degree or less, the proportions saying they were better off and worse off were roughly equal.
What’s more, “the types of challenges differ greatly by income,” the report found. Rent, food, gas and other bills top the list for those making less than $40,000 annually, whereas higher-income families are more concerned with retirement and education.
While about 47 percent of respondents would have been able to cover an emergency expense of $400 using cash or money in their checking or savings accounts, many would have to resort to other means: 29 percent would have put it on a credit card and paid it off in the next statement, 17 percent would have put it on their card and paid it off over time and 13 percent would have had to borrow from a friend or family member, among other responses.
About half of people said they are better off than their parents were at the same age, while 26 percent are “about the same” and almost 23 percent said they’re worse off.
The report was conducted in October and November and is in its third year. About 5,700 respondents completed the survey.