Industry News

On May 23, 2019, the Federal Reserve Board released its Report on the Economic Well-Being of U.S. Households in 2018. The report is based on the Survey of Household Economics and Decisionmaking (SHED), a consumer online survey, conducted in October and November 2018, with a sample of over 11,000 individual completed responses. The purpose of the SHED is to better understand the financial state of U.S. households with regard to: 1) household financial well-being; 2) housing; 3) economic fragility (including medical expenses); 4) credit availability; 5) borrowing for education; 6) savings; and 7) retirement.

Overall, the survey found that the majority of the population has recovered significantly since the survey began in 2013. However, many of the respondents were struggling to save for retirement and economic challenges remain for a significant portion of the population, particularly those with lower incomes.

Of the non-retired adults surveyed, 36% think their retirement savings is on track, 44% are not on track, and 20% are uncertain. In 2018, 75% of respondents reported “living comfortably” or “doing okay” financially, up from 63% in 2013. In addition, 87% of adults with a bachelor’s degree or higher are substantially more likely to be doing at least okay financially as compared to 64% with a high school degree or less.

In 2018, almost 50% of retirees retired before age 62 and about 25% retired between the ages of 62 and 64. Overall, early retirees reported similar levels of economic well-being as later retirees.

The study found that economic well-being varies considerably due to the reasons for retirement. Generally, 90% of retirees that based their retirement decision on wanting to do other things than work are doing okay financially as opposed to more than 50% who retired due to poor health.

The report is available here.