American households earning less than $75,000 per year are wrestling with financial uncertainty, as per the Financial Well-Being 2024 Report by Assurance IQ. This issue is particularly acute for individuals over 50. The data underscores the urgent need for improved financial planning and safety nets to safeguard these vulnerable groups.
Nearly half (45%) of these financially strapped folks are anxious about their family’s ability to maintain their current lifestyle should they pass away, highlighting imminent economic vulnerability. These concerns have created a surge in demand for sound financial planning and robust life insurance coverage while simultaneously emphasizing the necessity for improvements in financial literacy.
The study also highlights prevalent socioeconomic disparities and thus the significance and urgency of policy initiatives addressed towards wealth redistribution and income inequality.
From the survey conducted last year, it was evident that a substantial number of respondents above 50 earning an income less than $75,000 annually were facing serious financial struggles. This includes difficulties in meeting bill payments, covering health insurance deductibles, and availing proper medical attention due to its cost. The data further suggested a strong correlation between a low income and poor health outcomes, such as chronic diseases.
The data also pointed out that many aging Americans were not prepared enough for retirement, with lack of financial reserves forcing them to rely more on social security.
Financial challenges for low-income, aging Americans
This reinforced the harsh economic conditions these individuals were forced to traverse.
Additionally, despite their susceptibility to health issues due to their advanced age, the high cost of out-of-pocket health expenses made insurance inaccessible for many.
In conclusion, the survey painted a grim picture, where a substantial proportion of Americans over 50 with an income less than $75,000 struggle to make ends meet, let alone plan for potential future needs. There is an urgent need to address their financial and health-related challenges through comprehensive policies and initiatives.
Despite government attempts to provide pandemic-related financial relief, the situation has failed to improve for lower and mid-income earners. Issues like rising inflation, soaring credit card and personal loan interest rates are among the reasons contributing to the worsening scenario. The survey also surfaced a significant lack of financial safeguards within this group. Only 36% have life insurance, and a mere 46% have made a will.
Jennifer Gilbert, Assurance IQ’s Director of Customer Marketing, stresses that living paycheck to paycheck leaves little scope for long-term financial planning. Urging the financial sector to focus on inclusivity, Jennifer emphasizes the need for services that cater to a broader demographic, not just the economically fortunate. The objective is to help more people plan and secure their financial future.