NEW YORK--(The New American Family: The MetLife Study of Family Structure and Financial Well-Being from the MetLife Mature Market Institute and the Society of Actuaries, there is a proliferation of households headed by single people who are feeling a strain on household finances, leading to stress about meeting living expenses, paying for health care and saving for their later years.)--The changed profile of the American family has impacted financial well-being and the ability to prepare for retirement. According to
“Families are challenged economically, in terms of paying day-to-day expenses and how they’re preparing for retirement.”
Those in households headed by couples report the same concerns about the myriad risks they face, though in fewer numbers. While couples in first marriages report that they are better off financially, on average, than those in second marriages, the data indicates that couples in second marriages do not feel more vulnerable to financial risks like inflation, stock market fluctuations or outliving retirement resources.
The study, for which GfK Custom Research North America surveyed 2,500 adults age 45-80, builds on the Society of Actuaries’ Committee on Post-Retirement Needs and Risks’ definitions of 15 retirement risks and contains a host of strategies for individuals, families, employers and policy-makers to help those trying to make the best of their financial situations in difficult economic times.
According to the latest U.S. Census figures, there were 31 million single-person households in the U.S. in 2010, up 15% since 2000 and four times more than the seven million in 1960. Married couples represent fewer than half (48%) of households (the first time that figure has been less than half since data collection on families began in 1940) and only 20% of all households in the U.S. are married with children.
“While couples are better off financially and more prepared to confront financial challenges, the economy is affecting almost everyone and there is a societal need to address what may be a crisis in the coming years as the population ages and these trends continue,” said Sandra Timmermann, Ed.D., director of the MetLife Mature Market Institute. “Families are challenged economically, in terms of paying day-to-day expenses and how they’re preparing for retirement.”
The data in the study show that:
- Overall, the families surveyed have concerns about their ability to pay living (53%) and medical (49%) expenses. Significantly more non-couples have concerns about paying living expenses.
- Respondents cite external factors for their concern – tax increases (39%), changing interest rates (30%), stock market fluctuations (29%) and reductions in pensions and annuities (20%).
- 54% of respondents fear changes in Social Security and Medicare will reduce their retirement resources; many will rely heavily on Social Security as a source of income.
- Longevity poses risks, as many of those polled say they might not have enough money to pay for health care (45%) and a long-term stay in a nursing home (44%) as they age.
- 52% of those with adult children have provided them with some type of financial assistance, primarily because of a job loss.
- 40% of those polled feel they are behind on their plans to save for retirement.
“There are a number of changes that individuals, employers and government can make,” said Anna Rappaport, FSA, chair of the Society of Actuaries’ Committee on Post-Retirement Needs and Risks. “Having a steady income is imperative, so the high unemployment rate is causing a problem across the board. Because families are vulnerable, strategies can include cutting spending, reducing debt and increasing savings. With the demise of the traditional defined benefit plan, employers might consider crafting strategies to help employees generate a steady stream of income in retirement. Additionally, Americans should consider financial products that will guarantee that they have enough money to make sure unexpected shortfalls will not derail their retirement plans.”
The full study provides individual strategies tailored to each type of family, including:
- Maintaining health insurance.
- Making sure legal affairs are in order.
- Paying attention to Social Security and evaluating the age at which you will collect benefits because the longer you wait the higher the monthly pay-out will be.
- Being certain to have contingency plans for the unexpected.
- Getting educated on retirement planning and risk management options.
- Taking advantage of workplace benefits programs, including protection products like disability insurance, long-term care insurance and life insurance to protect spouses and children.
- Getting help from a trusted professional financial advisor.
The New American Family: The MetLife Study of Family Structure and Financial Well-Being was conducted between February 8 and February 19, 2012. The national online survey included 2,522 adults age 45 to 80 who were grouped into one of the following six family structures with and without children: Couples (first marriage, second marriage, domestic partnership), Non-couples (divorced/separated, widowed, single/never married).
Society of Actuaries Committee on Post-Retirement Needs and Risks
The committee’s mission is to initiate and coordinate the development of educational materials, continuing education programs and research related to risks and needs during the post-retirement period. Individuals interested in learning more about the committee’s activities are encouraged to contact the Society of Actuaries at 847-706-3500 for more information. Additional information and research reports may be found at www.soa.org.
The MetLife Mature Market Institute®
Celebrating its 15-year anniversary in 2012, the MetLife Mature Market Institute is Metropolitan Life Insurance Company's (MetLife) center of expertise in aging, longevity and the generations and is a recognized thought leader by business, the media, opinion leaders and the public. The Institute's groundbreaking research, insights, strategic partnerships and consumer education expand the knowledge and choices for those in, approaching or working with the mature market.
The Institute supports MetLife's long-standing commitment to identifying emerging issues and innovative solutions for the challenges of life. MetLife, Inc. is a leading global provider of insurance, annuities and employee benefit programs, serving 90 million customers. Through its subsidiaries and affiliates, MetLife holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, please visit: www.MatureMarketInstitute.com.
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