60% say they are not saving enough for
retirement
Primerica, Inc. (NYSE: PRI), a leading provider of financial
services and products in the United States and Canada, released its
Financial Security Monitor™ (FSM™) survey for the first quarter of
2024, revealing two-thirds (66%) of middle-income Americans feel
their education did not adequately prepare them to manage their
finances as adults, with a notable discrepancy across age
groups.
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Primerica Household Budget Index™ - In
February 2024, the average purchasing power for middle-income
households was 101.2%, slightly down from 101.6% in January 2024. A
year ago, the index stood at 95.9%. (Graphic: Business Wire)
A majority of those under age 65 said their financial education
fell short, with the youngest age brackets expressing the highest
level of dissatisfaction, including 73% of those ages 18-34, 69% of
those 35-49, and 65% of ages 50-64. In contrast, a majority (61%)
of men over 65 felt their education did a good job preparing them —
the only demographic to believe so — while a majority (57%) of
women in the same age group said the opposite.
Specifically, most middle-income Americans said schools did not
prepare them for tasks such as doing taxes (71%), paying back
student loans (67%), taking out and paying back loans (64%), or
setting a household budget (59%).
“We are seeing a clear lack of confidence among middle-income
Americans who believe their education failed to prepare them to
manage their personal finances, with an overwhelming majority of
young people feeling left behind,” said Glenn J. Williams, CEO of
Primerica. “These are gaps we have to recognize and address as
people plan their financial futures and navigate a fluctuating
economic environment that, in recent years, has left middle-income
Americans feeling incredibly uncertain about their financial
situations.”
The latest FSM™ survey coincides with the release of Primerica’s
Household Budget Index™ (HBI™), which indicates middle-income
households experienced a slight dip in purchasing power after a
stronger start to the year, as rising costs for necessities like
gas slightly outpaced income gains. The HBI fell to 101.2% in
February from 101.6% in January but is still up notably from 95.9%
compared to one year ago.
“Gas price increases are often immediately felt by middle-income
Americans, with a direct impact on their purchasing power with
every fill-up. Relative to a year ago, middle-income households are
doing a bit better as the prices of most necessities have increased
only a small amount and gasoline has come down some while incomes
have risen at a faster pace on average than overall inflation,”
said Amy Crews Cutts, Ph.D., CBE®, economic consultant to
Primerica. “While the slight loss of purchasing power for middle
income households from January to February is equivalent to the
cost of a fancy coffee drink, it is a reminder that inflation is
still troublesome for households trying to keep a budget and plan
for their financial future.”
Key Findings from Primerica’s U.S. Middle-Income Financial
Security Monitor™
- Schools fall short on financial education, with generational
divide. The majority (66%) of middle-income Americans feel the
education they received during their upbringing didn't equip them
to manage their finances as adults. Nearly half (49%) say that it
did not prepare them well at all, with a third (33%) saying it
prepared them very or somewhat well.
- Middle-income Americans are increasingly concerned about
credit card debt. More than a third of middle-income Americans
(38%) are more concerned about their credit card debt compared to a
year ago. A majority who feel this way also report spending less
overall (71%, up 9 points since December 2023), and some say they
are looking at additional income sources (32%, up 6 points) or debt
consolidation (16%, also up 6 points).
- Most middle-income Americans merge finances with their
partner after marriage. About three-quarters (73%) of married
Americans merge their finances with their partners, a fifth (20%)
keep their finances separate from their partner, and less than a
tenth (7%) say they do something else. Of note, college-educated
women show a higher tendency to keep their finances separate from
their partners (64% merge, 21% separate, 15% something else).
- Middle-income Americans are saving less for retirement.
The percentage of people putting less money into their retirement
accounts has increased 7 points over the past two years even as 60%
do not believe they are saving enough to retire comfortably.
- Rising cost of necessities remains an issue. Most
middle-income Americans (88%) say recent increases in food prices
have impacted them and their family. Individuals report having to
buy cheaper options for similar products (68%), buy less food
(54%), change their eating habits (48%), use coupons more
frequently (37%), and buy more in bulk (30%).
Primerica Financial Security Monitor™ (FSM™) Topline Trends
Data
Mar.
2024
Dec.
2023
Sept.
2023
Jun.
2023
Mar.
2023
Dec.
2022
Sep.
2022
Jun.
2022
Mar.
2022
How would you rate the condition of your
personal finances? (Reporting “Excellent” and “Good”
responses.)
Analysis: Respondents remain split on
their assessment of their personal finances.
50%
50%
49%
50%
52%
53%
53%
54%
60%
Overall, would you say your income is…?
(Reporting “Falling behind the cost of living”
responses.)
Analysis: Concern about meeting the
increased cost of living dropped over the past year.
67%
68%
72%
71%
72%
72%
75%
75%
67%
Do you have an emergency fund that would
cover an expense of $1,000 or more (for example, if your car broke
down or you had a large medical bill)? (Reporting “Yes”
responses.)
Analysis: The percentage of Americans who
have an emergency fund that would cover an expense of $1,000 or
more has remained steady over the past year.
62%
60%
62%
61%
58%
59%
60%
61%
62%
How would you rate the economic health of
your community? (Reporting “Not so good” and “Poor”
responses.)
Analysis: Respondents’ rating of the
economic health of their communities has gotten worse over the past
year.
60%
57%
55%
54%
59%
53%
55%
58%
52%
How would you rate your ability to save
for the future? (Reporting “Not so good” and “Poor”
responses.)
Analysis: A significant majority continue
to feel it is difficult to save for the future.
67%
73%
71%
71%
73%
74%
73%
72%
66%
In the past three months, has your credit
card debt…? (Reporting “Increased” responses.)
Analysis: Credit card debt has remained
steady over the past year.
34%
35%
34%
33%
33%
39%
37%
29%
25%
About Primerica’s Middle-Income Financial Security Monitor™
(FSM™)
Since September 2020, the Primerica Financial Security Monitor™
has surveyed middle-income households quarterly to gain a clear
picture of their financial situation, and it coincides with the
release of the monthly HBI™ four times annually. Polling was
conducted online from March 6-11, 2024. Using Dynamic Online
Sampling, Change Research polled 1,312 adults nationwide with
incomes between $30,000 and $130,000. Post-stratification weights
were made on gender, age, race, education and Census region to
reflect the population of these adults based on the five-year
averages in the 2021 American Community Survey, published by the
U.S. Census. The margin of error is 3.0%. For more information
visit Primerica.com/public/financial-security-monitor.html.
About the Primerica Household Budget Index™ (HBI™)
The Primerica Household Budget Index™ (HBI™) is constructed
monthly on behalf of Primerica by its chief economic consultant Amy
Crews Cutts, PhD, CBE®. The index measures the purchasing power of
middle-income families with household incomes from $30,000 to
$130,000 and is developed using data from the U.S. Bureau of Labor
Statistics, the US Bureau of the Census, and the Federal Reserve
Bank of Kansas City. The index looks at the cost of necessities
including food, gas, utilities, and health care and earned income
to track differences in inflation and wage growth.
The HBI™ is presented as a percentage. If the index is above
100%, the purchasing power of middle-income families is stronger
than in the baseline period and they may have extra money left over
at the end of the month that can be applied to things like
entertainment, extra savings, or debt reduction. If it is under
100%, households may have to reduce overall spending to levels
below budget, reduce their savings or increase debt to cover
expenses. The HBI™ uses January 2019 as its baseline. This point in
time reflects a recent “normal” economic time prior to the COVID-19
pandemic.
Periodically, prior HBI™ values may be revised due to revisions
in the CPI series and Consumer Expenditure Survey releases by the
U.S. Bureau of Labor Statistics (BLS). Beginning with the October
2023 release of the HBI™ data, health insurance costs will no
longer be included in the calculation of the HBI™ data as part of
the healthcare component because of some newly acknowledged
methodology that has been used by the BLS to calculate the health
insurance CPI. The health insurance CPI, as calculated by BLS, does
not measure consumer costs of health insurance such as the cost of
premiums paid or a combination of premiums and deductibles, but
rather premium values retained by health insurers we do not believe
it accurately reflects consumer experiences. The healthcare
component will continue to include medical services, prescription
drugs and equipment. Prior published values have been adjusted to
reflect this change. For more information visit
householdbudgetindex.com.
About Primerica, Inc.
Primerica, Inc., headquartered in Duluth, GA, is a leading
provider of financial products and services to middle-income
households in North America. Independent licensed representatives
educate Primerica clients about how to better prepare for a more
secure financial future by assessing their needs and providing
appropriate solutions through term life insurance, which we
underwrite, and mutual funds, annuities and other financial
products, which we distribute primarily on behalf of third parties.
We insured over 5.7 million lives and had over 2.9 million client
investment accounts on December 31, 2023. Primerica, through its
insurance company subsidiaries, was the #3 issuer of Term Life
insurance coverage in the United States and Canada in 2022.
Primerica stock is included in the S&P MidCap 400 and the
Russell 1000 stock indices and is traded on The New York Stock
Exchange under the symbol “PRI”.
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Public Relations Gana Ahn, 678-431-9266
gana.ahn@primerica.com
Investor Relations Nicole Russell, 470-564-6663
nicole.russell@primerica.com
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