While a majority of Americans define the American Dream as financial security for themselves and their family, many people don’t foresee themselves achieving that goal.
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A new report from MassMutual found that while most people are confident in their ability to pay bills and budget, 54 percent of survey respondents don’t think they will ever truly be financially secure.
Those perceptions may be understandable when the aftermath of the financial crisis is factored into the equation. Even as the economy strengthens, the 2007-2008 crash is likely to result in a lifetime income loss of $70,000 for every American, while output levels are unlikely to return to their pre-crisis trend levels, according to a recent study from the Federal Reserve Bank of San Francisco.
That could help explain why saving is a challenge. Eight percent of MassMutual’s survey respondents reported having no cash stashed away in case of an emergency. Nearly 20 percent have less than one month of expenses saved, while only 21 percent have between three to six months’ worth of emergency savings.
Only 33 percent of people were confident they were doing a good job preparing for retirement.
Americans trying to save are also plagued by large debt loads. MassMutual found that the majority of Americans have some type of debt, with the largest percentage due to mortgages. On average, individuals’ mortgage debt is about $188,795. Fifty-six percent of people reported having credit card debt, with the average per person amount at nearly $10,400. Meanwhile, about one-quarter of respondents had student loan debt, which averaged about $39,900 per person.
On the bright side, about three-quarters of Americans were confident in their ability to make big-ticket purchases, while only 33 percent thought the American Dream was disappearing.