Economic Insecurity

Thirty-one percent of non-retired respondents report that they have no retirement savings or pension at all, including 27 percent of non-retired respondents age 60 or older.
Forty-nine percent of adults with self-directed retirement accounts are either “not confident” or only “slightly confident” in their ability to make the right investment decisions. [pp. 2-3]
To determine individuals’ preparedness for a smaller-scale financial disruption, respondents are asked how they would pay for a hypothetical emergency expense that would cost $400. Just over half (54 percent) report that they could fairly easily handle such an expense, paying for it entirely using cash, money currently in their checking/savings account, or on a credit card that they would pay in full at their next statement (collectively referred to here as “cash or its functional equivalent”). The remaining 46 percent indicate that such an expense would be more challenging to handle and that they either could not pay the expense or would borrow or sell something to do so.
Specifically, among respondents who would not pay the expense in-full using cash or its functional equivalent, 38 percent would use a credit card that they pay off over time and 31 percent simply could not cover the expense. Over a quarter would borrow from friends or family, and smaller fractions would either sell something, use a payday loan, bank overdraft, or bank loan (figure 11). [p. 22]
- Board of Governors of the Federal Reserve System, Report on the Economic Well-Being of U.S. Households in 2015, May 2016

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