Press release originally published on January 7, 2021 (view original source).
Savology, a digital financial wellness platform helping American households improve their financial outcomes by providing accessible financial planning, publishes a comprehensive state of household personal finances report.
Savology examined anonymized data from approximately 40,000 financial plans created across all 50 states and Washington D.C. in 2020 to create a holistic report that covers all personal finance areas including savings, income, debt, spending, insurance, estate planning, risk management, and retirement outlook.
“Our goal was to measure and understand the complete spectrum of personal finances”, says Savology founder and CEO, Spencer Barclay. “The information in this report can help us identify the gaps and needs of American households so that we [and others] can more effectively address the problems at hand.”
While the average reported savings rates were higher than anticipated at 13.8%, retirement still remains out of reach for the majority of households with 72% not on track to meet their retirement goals. This means that only 1 in every 4 households (28%) are on track to reach their goals.
Additional key findings, among many others, include the following:
- While households are saving a noticeably higher amount than previous years, the average savings rate deficit is still 9.1%.
- Only 36.7% of households have all of the recommended types of insurance needed to mitigate risk based on their specific familial needs.
- Households with dependents are not adequately covered by life insurance. Nearly 50% do not have any, and many of those that do have a significant gap.
- Estate planning is one area of financial planning that seems to be significantly neglected, with only 23% having at least a basic will and 2.4% having a complete estate plan.
- The average retirement shortfall is more than 10 years, meaning that Americans will either have to delay retirement or adjust their target lifestyle and retirement goals.
While these numbers do show cause for concern, Savology believes through accessible and effective financial planning, households will be able to better understand financial situations and make meaningful improvements.
“As someone who has repeatedly witnessed the impact of not having access to proper financial planning and overall literacy, I can say with confidence that we’re helping households improve their overall well-being and quality of life,” says Savology’s Director of Marketing, Kristian Borghesan. “Having now seen the numbers and the data, we know all too well that we have our work cut out for us to better the financial lives of millions.”
For more information about the report and to view the major findings across all financial areas visit The State of Personal Finance 2020.
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