New “2022 Wealth & Wellness Index” Shows Many Americans Less Confident in Their Finances and the Economy Entering Third Year of the Pandemic
January 11, 2022 by Empower
REDWOOD SHORES, Calif.–(BUSINESS WIRE)–As we embark on the third year of the COVID-19 pandemic, the U.S. economy is making a remarkable comeback after enduring a tumultuous two years. Roughly 80% of the jobs lost to the pandemic have been regained, unemployment rates have normalized and today’s jobseekers have the upper hand.
Yet, Americans’ views of their financial health are languishing, and many consumers don’t feel confident about their current financial situation or the economy. According to a new annual 2022 Wealth & Wellness Index released today from retirement services provider Empower Retirement and affiliate hybrid wealth manager Personal Capital, only 34% of American consumers surveyed say they are “very financially healthy,” a 14% drop versus when asked in March of 2021 (48%). The survey, conducted by the Harris Poll, finds economic confidence among respondents also remains relatively low at 40%, down 2% from one year prior and down 12% from the start of the pandemic.
“It’s a fact of life that forces in the economy are going to impact how confident people feel about their finances,” said Empower President and CEO Edmund F. Murphy III. “Periods like this represent opportunities for savers to become even more engaged in their finances and seek the advice they need to help reassure them in their financial plan or put them on a path to help drive renewed confidence.”
So, what’s causing many Americans to feel less confident in their finances and in the economy right now, despite positive indications at a macroeconomic level?
“It’s a complicated picture to describe what’s happening to the economy,” says Chief Investment Officer at Personal Capital, Craig Birk. “The labor market is strong and retail growth is ticking upwards, but we’re also dealing with recent market volatility and record high inflation. It’s unsettling for many.”
Despite this relatively recent decline in confidence, American consumers surveyed report feeling optimistic about their longer-term financial futures. According to the study’s key indicators of financial wellness, many are feeling hopeful and optimistic (40%) about their path towards optimizing their financial health.
Americans are also prioritizing financial goals in 2022. When asked what their top new year’s resolution is, paying off personal debt (37%) and saving for retirement (36%) now surpass traditionally common goals like exercising more (33%) and losing weight (28%).
“The fact that paying off debt is a higher priority than exercising shows many people want to improve their financial health, and it’s clear that financial confidence is intrinsically linked to overall health and wellness,” says Personal Capital’s Chief Marketing Officer, James Burton. “Americans are seeking financial advice, and we don’t see this boom in financial planning changing anytime soon. In the past year, we’ve seen an 88% increase in net new client assets, excluding market gains, and we are fully prepared to meet the growing demand this year.”
For more information on the “2022 Wealth & Wellness Index,” see an overview of the results here.
Headquartered in metro Denver, Empower administers approximately $1.1 trillion in assets1 for more than 12.6 million retirement plan participants and is the nation’s second-largest retirement plan recordkeeper by total participants.2 Empower serves all segments of the employer-sponsored retirement plan market: government 457 plans; small, mid-size and large corporate 401(k) clients; nonprofit 403 (b) entities; private-label recordkeeping clients; and IRA customers. Personal Capital, a subsidiary of Empower, is an industry-leading hybrid wealth manager.
About Personal Capital, an Empower Company
Personal Capital is a remote-delivery, industry-leading digital wealth management company that helps people transform their financial lives through technology and advisory services. The company’s state-of-the-art tools and technology provide consumers with a holistic financial picture and are used by over 3.1 million people to track $1.3 trillion in account assets (as of 11/30/21). Its wealth management advisors provide expert guidance, and customized strategies, based on a personal understanding of an investor’s financial picture and goals. For more information, please visit www.personalcapital.com or connect with us on Facebook, Twitter or LinkedIn.
Advisory services are offered for a fee by Personal Capital Advisors Corporation, a wholly owned subsidiary of Personal Capital Corporation. Personal Capital Advisors Corporation is a registered investment advisor with the Securities and Exchange Commission (“SEC”). SEC registration does not imply a certain level of skill or training. Investing involves risk. Past performance is not a guarantee or indicative of future returns. The value of your investment will fluctuate, and you may gain or lose money.
1 Pension & Investments 2020 Defined Contribution Survey Ranking as of April 2021.
2 As of Sept. 30, 2021. Information refers to the business of Great-West Life & Annuity Insurance Company and its subsidiaries, including Great-West Life & Annuity Insurance Company of New York and GWFS Equities, Inc. GWLA’s consolidated total assets under administration (AUA) were $1.125B. AUA is a non-GAAP measure and does not reflect the financial stability or strength of a company. GWLA’s statutory assets total $76.1B and liabilities total $73.1B. GWLANY statutory assets total $4.2B and liabilities total $3.3B.
Securities offered and/or distributed by GWFS Equities, Inc., Member FINRA/SIPC. GWFS is an affiliate of Empower Retirement, LLC; Great-West Funds, Inc.; and registered investment adviser, Advised Assets Group, LLC. Investing involves risk, including possible loss of principal. This material is for informational purposes only and is not intended to provide investment, legal or tax recommendations or advice.
©2022 Empower Retirement, LLC. All rights reserved.
Jacqueline Quasney, Director of PR