During the coronavirus pandemic and the resulting recession, millions of Americans have struggled to maintain even a semblance of their pre-pandemic financial stability. But as the U.S. reaches the tail end of the outbreak, many look forward to a better future.
CUNA Mutual Group, a mutual insurance company headquartered in Madison, Wis., found in a new survey that the American middle class remains optimistic about their ability to achieve the American Dream in a post-pandemic world.
Specifically, respondents rated their ability to reach this milestone at B-minus — higher than the C-plus given in March and May 2020 and the C of May 2019.
Middle-class Americans experiencing disconnect between financial goals and reality
Amid a slew of pandemic-driven changes to consumer money habits, the CUNA Mutual Group survey showed that the American middle class’s confidence in their personal finances has increased. Seventy-one percent of respondents now feel somewhat or very confident in their personal economic position, compared with 63% in March and May 2020 and 61% in May 2019.
The findings indicate that Americans have a brighter outlook on their retirement, too, as 89% of consumers expect to retire in their lifetime — a two percentage point increase from May 2020. Meanwhile, the number of people who expect to retire before 65 jumped to 39% from 30% in May 2020.
And while no one can dispute that the COVID-19 pandemic has hurt the financial situations of many Americans, a lot of respondents said they’re in a better place financially than they were a year ago. This includes:
- 72% who felt their job is equally or more stable than it was a year ago
- 30% who saw a decrease in their financial stability (versus 38% who said the same in May 2020)
However, a closer look at respondents' personal finances indicates that not everything is as great as it seems. Many still have trouble building their emergency savings — in fact, 45% admit they only have three months or less in their emergency fund, a percentage similar to the 47% who said the same in May 2020. Plus, 57% experienced setbacks due to the pandemic, including 35% to their physical or mental health.
Meanwhile, a survey from Caring Advisor, a senior living resource, revealed that only 14% of Americans 50 and older would be able to retire tomorrow if necessary.
"While it's encouraging to see rising optimism among the middle class, especially after a year of unprecedented loss and financial difficulty, it's apparent that the gap between awareness and preparedness is growing only starker," said Paul Chong, who serves as senior vice president of CUNA Mutual Group. "This further underscores that the retirement crisis is still very real and stands to worsen coming out of the pandemic."
Latinos show more positivity but greater setbacks in their financial futures
Despite facing greater financial challenges than the general population, Latino respondents are more optimistic about the middle class's ability to attain the American dream. In fact, 62% of Latinos gave it an A or B grade — 13 percentage points higher than respondents overall, at 49%.
Surprisingly, even though Latino women remained the most positive among all racial and gender demographic groups (65%), they were less confident in their personal ability to achieve the American dream than Latino men (66% versus 71%).
Compared to the general population, Latino respondents were also more likely to:
- Experience setbacks because of the pandemic (80% versus 57%)
- Experience setbacks to their mental or physical health (51% versus 35%)
- Have three months or less in emergency savings (50% versus 45%)
That doesn't mean they're not interested in improving their situation, though. Recent findings from Chase indicate that people of color, particularly Latino and Black consumers, are making greater efforts than the general population to secure a better financial future by improving their credit, starting a new business or picking up a side hustle.
Methodology: Engine Insights conducted a general population survey for CUNA Mutual Group from April 14 to April 18, 2021, of 1,000 U.S. adults 18 and older with an annual income between $35,000 and $99,999.
An oversampling of 800 Black and Latino adults 18 and older with an annual income between $35,000 and $99,999 was conducted from April 19 to April 22, 2021.