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Board of Governors of the Federal Reserve System
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Report on the Economic Well-Being of U.S. Households in 2014


The results of this survey highlight the range of economic challenges that are faced by some individuals, households, and families in the United States several years after the Great Recession.

In general, the majority of the population is continuing to recover from the financial crisis and the effects it had on their personal finances and financial well-being. Most people report that they are living comfortably or doing okay, an increasing fraction of the population expects income growth in the coming year, and a majority of Americans feel that credit is sufficiently available to them.

However, despite these reasons for optimism about the economic conditions in the United States, the findings in this survey highlight that economic challenges remain for a significant portion of the population. Forty-seven percent of respondents say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money. Nearly a third of respondents went without some medical treatment in the past year because they could not afford it. Further, 36 percent of all workers, and 49 percent of those working part time, would prefer to work more hours at the same pay if they were able to.

The survey also highlights the extent to which these economic challenges are particularly prevalent among respondents with less income. Among those making under $40,000 per year, over half report that they are either finding it difficult to get by or are just getting by, only 31 percent would cover a $400 emergency expense without borrowing money or selling something, and just 42 percent have any retirement savings. Lower income respondents disproportionately lack retirement savings, and their expectations reflect this: 55 percent of non-retired, non-disabled individuals making under $40,000 per year expect to never retire or plan to keep working as long as possible.

Several pockets of concern also emerge in the survey results with respect to education, retirement planning, and credit access. Although respondents with a postsecondary degree overwhelmingly feel that the lifetime benefits exceed the cost, non-completers report a vastly different experience. Those who do not complete an associate or bachelor's degree are disproportionately likely to be behind on their student loan payments and to feel that their education was not worth the cost. Recognizing that many non-completers are first-generation college students who come from backgrounds with fewer economic resources, the combination of student loan debt and no degree may represent a further hindrance toward economic advancement for these individuals.

In an era where self-directed retirement planning is increasingly expected, the survey illustrates the extent to which individuals do not feel confident in their ability to manage their retirement investments. Just over half of respondents with self-directed retirement accounts are either "not confident" or only "slightly confident" in their ability to make the right investment decisions when investing the money in these accounts. This lack of confidence poses a potential risk on the path to retirement for younger generations of workers for whom self-directed retirement accounts are increasingly the norm.

A sizeable portion of the population also indicates that they are interested in obtaining credit but are unable to find it through the traditional financial channels, with many indicating that they are instead relying on some form of alternative financial services. Approximately one-sixth of respondents were denied credit, were offered less credit than they desired, or desired credit but did not apply for fear of denial. Of those who were denied, offered less credit, or feared denial, 38 percent used some form of alternative financial services such as a payday loan, check cashing service, pawn shop loan, auto title loan, paycheck advance, or money order.

Although the U.S. economy is recovering from the Great Recession and most individuals appear to be generally stable financially, there are clearly segments of the population who are still struggling on one or more dimensions. These consumers remain vulnerable to economic hardship in the case of further financial disruption or are at risk of economic hardship in the future due to an inability to save for future needs such as retirement. The survey results highlight the need to continue to monitor these vulnerable populations and assess the extent to which they are, or are not, benefitting from broader economic recovery.

Last update: June 9, 2015

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