Phase 1: Dec. 18, 2019 – Jan. 9, 2020
Phase 2: March 25 – April 1, 2020
And, although the market has dropped significantly, consumer confidence for having enough money saved to live comfortably in retirement has only decreased 5% overall.3
The learnings from just over 10 years ago are front-of mind for many consumers today, and are being applied to the market volatility we’re currently experiencing.
Being careful with finances has influenced some lifestyle changes for some of our respondents. This means curbing spending that had been previously planned, prior to COVID-19. “I’m putting off traveling and any larger expenses,” said one survey respondent.
For other survey respondents, just “remembering to breathe and not act too quickly,” is the plan for the near future.
For the most part, consumers appear to be targeting three main behaviors, in regards to their finances:
Most of our survey respondents reported they have a plan for funds to go towards savings, bills, or debt. “I learned from our depression era parents to be frugal, save, and strive to be debt free,” said a male baby boomer.
We found several ways consumers plan to spend any funds they may receive from upcoming tax returns and/or stimulus checks. Our survey respondents report most that they’ll use the funds to:
Several consumers mentioned they plan to seek advise regarding specific questions from a financial professional. Others report they’ll keep money where it is, and stay the course. As one female respondent over the age of 70 shared: “I think my account is pretty good and hopefully the markets will stabilize in the next quarter … and hopefully the coronavirus, especially here in NYC, will not take many more lives, and the people affected will get the help they deserve to get better.”
Folks are generally staying the course and being rather conservative fiscally. Our research found that 66% of overall survey participants don’t plan to do anything with their investments.
Watching the market more often
Doing nothing
Despite financial challenges and the COVID-19 pandemic, some consumers are reporting confidence during these challenging times, as mentioned earlier. And, from our research, we can see that this group is taking certain actions with their finances.
Our survey’s ‘super savers’ (workers who defer more than 90% of the IRS maximum in their workplace retirement savings plan).
It makes sense that those who have saved more are likely more confident, but it’s a dramatic comparison worth noting: 56.6% of super savers are confident, compared to 43.2 % of non-super savers.
One of the first priorities for building retirement security is an emergency savings account—so when adversity hits, consumers don’t have to turn to their retirement savings for a lifeline.
Building an emergency fund and working with a financial professional are good first steps for consumers to prepare for difficult financial challenges. But, there are other ways financial pros can help clients during the days, weeks, and months ahead.
In regards to what consumers are currently seeking from financial professionals, here’s what we heard6:
Principal will continue to reach out to consumers, financial professionals, and plan sponsor in the time ahead to garner insights into how COVID-19 and market volatility is impacting us all—so that we can strive to find ways to empower and educate our clients.