While the coronavirus pandemic and ensuing financial crisis caused many to lose jobs and income, those who were able to hold onto their assets are still concerned about the future.
A new survey from Ameriprise Financial found over 6 in 10 Americans with at least $100,000 in investable assets report that protecting their finances and preparing for uncertainty are more important to them now than before the pandemic.
Despite most respondents maintaining or even increasing their incomes over the past year, the survey shows they might have lost some confidence in their ability to do the same if and when the next crisis comes around.
Nearly two-thirds of investors will start saving for emergencies
The beginning of the COVID-19 crisis brought an abundance of uncertainty as people around the world not only feared for their health, but also for their livelihoods and financial security. The majority of investors surveyed, like surely many others, are more concerned with the physical well-being of their families than they were pre-pandemic.
That concern could be heping fuel these investors’ increased attention to emergency savings, with 63% who did not previously have an emergency savings fund reporting they have created one or plan to do so. While their investable assets could certainly help in the event of a dire financial emergency, an easily accessible cash cushion is typically a better plan.
Further, nearly half of the investors surveyed have drawn up or plan to work on a will or estate plan if they didn’t have one prior to the pandemic. Planning for the future doesn’t stop with the individual as these consumers demonstrate. In fact, along with their own financial security, respondents have become increasingly concerned with their families’ finances.
Financial affairs become family matters
Among the respondents who have children, nearly a third reported discussing finances more with their kids compared to before the pandemic. Whether that means teaching their children about saving and investing or discussing plans for the future, it appears money talks may no longer be just "grown-up conversations."
Additionally, respondents claimed to be having more conversations about money with their spouses, partners and siblings when applicable. A quarter of investors and 23% of those with siblings reported increased dialogue surrounding long-term financial plans with these relatives. Siblings might be helping plan for their parents’ futures or simply comparing personal financial habits.
Retirement plans remain a focus
Though nearly 1 in 5 respondents accelerated their retirement plans due to the pandemic, the majority of respondents who had a planned date in mind are sticking with it for now. While the pandemic served as a stark reminder that things don’t always go according to plan, for now these investors are comfortable with their tentative timelines.
That being said, perhaps an emphasis on savings and investing has helped these consumers maintain the confidence that they will be able to retire according to plan. Over half of respondents said saving money has become more important since before the pandemic and 46% say the same for investing.
Though most hope to not see another crisis like the COVID-19 pandemic in their lifetime, it is clear that should something similar happen, they'll be more prepared.
Methodology: Ameriprise Financial Inc. commissioned Artemis Strategy Group to survey 3,028 Americans ages 30-70 with $100,000 or more in investable assets from Jan. 6-21, 2021.