Americans Report Rise in Optimism for 2012 Economy
But many still hesitant, delaying major financial decisions
(Des Moines, Iowa) - New research from the Principal Financial Well-Being IndexSM shows American workers report a sharp increase in optimism for the 2012 economic outlook. Twenty-seven percent report an optimistic outlook, up from just 12 percent in the third quarter of 2011.
Pessimism is also dwindling, with just 17 percent indicating they are pessimistic in their outlook for the year, down from 28 percent third quarter last year.
The Principal Financial Well-Being Index, which surveys American workers at growing businesses with 10 to 1,000 workers, is released quarterly by the Principal Financial Group® and is conducted online by Harris Interactive®.
Confidence is also on the rise among Americans when it comes to planning for the future and making financial dreams more of a reality. Forty-three percent of workers indicate some level of confidence in their ability to achieve their financial dreams, a 10 percent increase from the previous quarter.
While workers' views on the economy and their financial future are improving, more than half (51 percent) rate their personal financial situation as “about the same” compared to this time last year. Many are still holding back on major expenditures: 41 percent report they are delaying any long-term financial commitments, such as buying a home or car, due to economic uncertainty.
“Things are starting to look a little brighter for a growing number of Americans, but the economy still creates some hesitation, causing many to hold off making any long-term financial commitments,” said Luke Vandermillen, vice president of retirement and investor services for The Principal®. "While we share workers' optimism, it's also refreshing to see they're approaching their financial future with some caution."
Men and women differ in levels of financial confidence
The survey findings also show male workers having significantly more confidence than their female counterparts that they are adequately preparing for retirement. Forty-three percent of male workers believe they are saving enough money in order to live comfortably in retirement compared to 26 percent of female workers.
The gender disparity carries over to Americans’ confidence in their financial future, with 49 percent of male workers reporting some level of confidence in their ability to achieve their dreams for their financial future, compared to only 36 percent of female workers.
Americans who use the services of a financial professional are significantly more likely to have taken steps toward preparing for retirement than those who do not. Only 12 percent of workers who use a financial professional have not yet begun to plan for retirement savings compared to 32 percent of workers who do not.
“Many Americans find preparing for retirement challenging, even in the best of times, and often don’t save. But it’s clear that those who seek help from a financial professional feel they are in a better position to secure their financial future,” said Vandermillen. “It’s important to regularly evaluate where you are with your retirement planning and determine what you could be doing better.”
Additional findings include:
Workers plan to be responsible with income tax refunds
- Workers’ top plans for income tax refunds include saving or investing the refund (44 percent), paying down/off short-term debts (37 percent) or paying down/off longer-term debts (25 percent).
- Those who use a financial professional (53 percent) are more likely to say they will save or invest their refund than those who do not use a financial professional (41 percent).
Americans more engaged in the 2012 Presidential Election
- Thirty-seven percent of Americans plan to be more involved in this election than in past elections given the current state of the economy.
- Forty-one percent of males plan to be more involved in this upcoming presidential election compared to 32 percent of females.
This Principal Financial Well-Being IndexSM survey was conducted online within the United States by Harris Interactive on behalf of the Principal Financial Group® between January 30 and February 6, 2012 among 1,109 employees. Propensity score weighting was also used to adjust for respondents’ propensity to be online.
This is one in a series of quarterly studies to identify and track changes in the workplace of small and mid-sized (growing) businesses. The first Principal Financial Well-Being IndexSM survey was conducted in the United States in 2000.
About the Principal Financial Group
The Principal Financial Group® (The Principal®) is a global investment management leader including retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and a member of the FORTUNE 500®, the Principal Financial Group has $335 billion in assets under management and serves some 18 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.
About Harris Interactive
Harris Interactive is one of the world’s leading custom market research firms, leveraging research, technology and business acumen to transform relevant insight into actionable foresight. Known widely for the Harris Poll and for pioneering innovative research methodologies, Harris offers expertise in a wide range of industries, including health care, technology, public affairs, energy, telecommunications, financial services, insurance, media, retail, restaurant and consumer package goods. Serving clients in more than 215 countries and territories through its North American, European and Asian offices and a network of independent market research firms, Harris specializes in delivering research solutions that help clients stay ahead of what’s next. For more information, visit www.harrisinteractive.com.
- Survey of 1,109 employees conducted January - February 2012.
- "The Principal Financial Group" and "The Principal" are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
- As of Dec. 31, 2011.