January 7, 2025 Newswires

New York Life Wealth Watch 2025 Outlook: Americans’ financial confidence holds despite continued debt and inflation challenges

Business Wire

Almost half of American adults met their 2024 savings goal, saving on average $7,460.94; average credit card debt increased to $8,295.31

NEW YORK--(BUSINESS WIRE)--
New York Life’s 2025 New Year Outlook Wealth Watch survey finds that financial confidence persists for American consumers, despite ongoing financial pressures. At the close of 2024, 64% of adults remain confident in their ability to meet their financial goals, reflecting the same level of confidence as late 2023.

Americans were more aggressive in setting and reaching their savings goals this past year. Adults aimed to save $8,505.89 on average and actually saved $7,460.94 ($1,045 gap) – marking an improvement from 2023, when adults aimed to save $7,435.57 and saved $6,138.06 on average ($1,298 gap).

Still, despite steady confidence, almost half (43%) of adults reported feeling less financially secure than they did at the end of 2023, and 25% were unsure if they felt more or less secure. Notably, over half (52%) of adults who work with a financial professional report feeling more financially secure now than they did at the end of 2023, compared to just over a quarter (27%) of adults who do not work with a financial professional.

Americans overall express optimism about their finances and ability to retire at their desired age heading into 2025 – as well as higher savings compared to last year.

The top three words adults used to describe their finances at the end of 2024 heading into the new year are: hopeful (33%), stressed (33%), and anxious (28%), mirroring the top emotions reported at the end of 2023.
While Americans on average saved $7,460.94 in 2024, Millennials saved nearly double that figure:
- Gen Zers: $6,164.67
- Millennials: $12,004.87
- Gen Xers: $7,463.17
- Baby Boomers: $3,466.13
In terms of retirement, only 19% of adults report having a retirement strategy, and fewer adults report having retirement savings compared to late 2023 (36% vs 41%), but most adults who do have retirement savings are confident that their retirement savings will last the rest of their lives (67%).
- 76% of adults expect to retire at their desired age, which is 65 on average.
Adults are also preparing for the unexpected. Forty-seven percent have a fund or savings set aside specifically for an emergency, with an average of $18,483.04 saved – up from $15,027.74 at the end of 2023.
Importantly, adults who work with a financial professional are more likely to feel confident in their ability to reach their goals (84% vs. 58%).

“Americans are faced with ongoing change and uncertainty, which can make planning challenging,” said Jessica Ruggles, corporate vice president of Financial Wellness at New York Life. “Consumers are looking for security and control, especially when it comes to their finances. Our data has shown people who work with financial professionals tend to feel more secure and are more likely to have a financial strategy in place, inclusive of retirement savings and debt management. The new year is a great opportunity to adopt and adjust a financial strategy to adequately support unique needs. This may include working with a trusted financial professional to understand household goals and priorities, address barriers to wellbeing like debt, and adopt a protection mindset to enable financial resiliency when unexpected events occur. These steps are especially important for Gen Xers, as they are approaching retirement, but still carry the highest credit card debt, and just over one-third (37%) have retirement savings.”

Top-of-mind financial concerns for adults heading into the new year include inflation and credit card debt – caregivers and Gen Xers report credit card debt at higher rates.

Forty-nine percent of adults said inflation impacted their finances the most in 2024, followed by credit card debt (26%) and cost of housing (21%).
- Similarly, for 2025, adults anticipate inflation (54%) as a top concern likely to impact their finances, as well as credit card debt (23%) and fears of a recession (21%).
- Related to inflation concerns, 38% of adults expect their living expenses to be higher in the first half of 2025 than in late 2024.
Sixty-seven percent of adults reported having some form of debt, with the top sources being credit card debt (40%), mortgage or home equity debt (18%), and medical debt (18%).
- Adults with credit card debt owe an average of $8,295.31, slightly more than the average amount owed by adults in 2023 ($7,931.80).
- Those with credit card debt are contributing an average of $491.28 per month toward paying it down, an increase compared to the end of 2023 when they were contributing an average of $363.07 each month.
Gen Xers report additional strain from debt, and lower financial confidence.
- Gen Xers lead the pack in credit card debt, owing $10,140.99 on average, compared to:
  - Gen Zers: $2,990.13
  - Millennials: $6,859.13
  - Baby Boomers: $9,502.40
- Over half of Gen Xers (54%) feel confident in achieving their financial goals, but this is over 10 percentage points lower than other age groups. Millennials are the most confident, with 68% believing they will reach their goals.
Caregivers also report unique challenges:
- Most caregivers (90%) say that their caregiving responsibilities have increased or stayed the same compared to last year.
- Caregivers are more likely to have some type of debt compared to non-caregivers (75% compared to 62%).

“More Americans may find themselves serving as a caregiver, including a growing number of Millennials and Gen Zers – a quarter of caregivers surveyed report taking on these responsibilities in the past six months,” said Ruggles. “Family caregiving is a demanding responsibility with significant financial challenges due to the costs or loss of income associated with caregiving. However, our data shows that 82% of caregivers are planning to take action in 2025 in response to factors affecting their finances, more than the share of non-caregivers who report doing the same (68%). Caregivers report that they are adjusting their strategies by cutting back on discretionary spending and developing a secondary income stream. Most family caregivers are balancing care and work, and look to their employers for support across the spectrum of care.”

Still, adults are looking for ways to be more proactive and agile with their financial strategies to achieve their goals.

Adults are being proactive with their finances, with 57% reviewing their financial strategies or budget at least every quarter.
However, only 26% of adults report actually having a financial strategy in place and feeling confident in that strategy. Thirty-seven percent of adults report having no financial strategy at all, and 35% report they have a strategy but need help with it.
- Among those who need help with their financial strategy in response to a recent life change, 25% say it was due to retirement, 23% for growing their family, and 14% for purchasing a home.
In response to concerns like rising inflation, many adults (73%) are adjusting their financial habits in 2025: 37% are reducing discretionary spending, while 28% are modifying their budgets or financial strategies.
In terms of their investment strategies, many adults are planning to change their approach, with more than one-third (35%) planning on making changes to their investment portfolio or strategy in 2025.
- Most adults (89%) say they are planning to invest more or the same amount of money in 2025 as they did in 2024.
Those who work with a financial advisor or professional report higher levels of financial confidence, underscoring the value of partnering with a professional for guidance:
- Adults working with a financial professional are more likely to feel prepared relative to their peers across several areas, including being more prepared for a financial emergency (45% vs 16%), more able to manage debt (49% vs 23%), and more prepared for retirement (42% vs 15%).
- Still, only 15% of adults are planning to work with a financial professional to help reach their financial goals in 2025.
- Adults who work with a financial professional are more likely to have retirement savings (71% vs 28%) as well as a retirement strategy (41% vs 15%) compared to those that don’t.

“Financial stress and challenges are often seen as a personal responsibility, but strong financial foundations include building a team of experts to help you and your family manage and plan for a more secure, healthy future,” said Ruggles. “Rising financial uncertainty due to economic changes and growing costs continue to impact wellbeing and future outlooks. Despite uncertainty, we consistently see that relationships with financial professionals make a difference. No one should have to navigate their financial journey alone.”

ABOUT WEALTH WATCH

Wealth Watch is a recurring survey from New York Life that tracks Americans’ financial goals, progress toward those goals, and feelings about their ability to secure their financial futures, identifying key themes and trends that are emerging about topics like retirement planning, the role of protection-oriented solutions, and the importance of financial guidance.

SURVEY METHODOLOGY

This poll was conducted November 23 – 24, 2024 among a sample of 2,200 Adults. The interviews were conducted online, and the data was weighted to approximate a target sample of adults based on gender, age, race, educational attainment, and region. Results from the full survey have a margin of error of plus or minus 2 percentage points.

ABOUT NEW YORK LIFE

New York Life Insurance Company (www.newyorklife.com), a Fortune 100 company founded in 1845, is the largest mutual life insurance company in the United States¹ and one of the largest life insurers in the world. Headquartered in New York City, New York Life’s family of companies offers life insurance, disability income insurance, retirement income, investments, and long-term care insurance. New York Life has the highest financial strength ratings currently awarded to any U.S. life insurer from all four of the major credit rating agencies.²

¹ Based on revenue as reported by "Fortune 500 ranked within Industries, Insurance: Life, Health (Mutual)," Fortune magazine, 6/4/2024. For methodology, see https://fortune.com/franchise-list-page/fortune-500-methodology-2024/

² Individual independent rating agency commentary as of 10/4/2024: A.M. Best (A++), Fitch (AAA), Moody’s Investors Service (Aaa), Standard & Poor’s (AA+).