Education Spending Is the No. 1 Financial Disruptor Among Americans
February 06 2020 - 8:30AM
Business Wire
New survey highlights roadblocks to long-term
financial security
With 45 million Americans contributing to the $1.6 trillion in
student loan debt in the U.S.,1 the impact felt by education
expenses is widespread, especially when it comes to long-term
financial planning. According to a new survey conducted by The
Harris Poll on behalf of TD Ameritrade, education spending is the
No. 1 financial disruptor among Americans. One bright spot for
financially disrupted Americans — those who have experienced an
event or situation that had a negative effect on their financial
plans for the long-term or retirement — is that they feel more
prepared in 2019 than five years ago.
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Education Spending Ruled as a Top
Financial Disruption (Graphic: TD Ameritrade)
“Today, many young Americans are struggling to save for the
future while paying off their past,” said Tom Butch, managing
director of retail distribution at TD Ameritrade. “Between paying
down student loans, contributing to retirement and saving for their
children’s college, they are striking a delicate balance to set
themselves on a path to long-term financial security.”
Financial disruptions: cause and effect Education
spending is the leading financial disruptor among Americans in
2019, and of the surveyed disruptors, it’s also the only one to
experience growth in the last five years. In 2014, loss of
employment and poor investment/business performance significantly
outstripped education as sources of disruption.
“The cost of education has risen proportionally as a source of
disruption, as low unemployment and strong market performance seem
to have blunted what were the greatest concerns five years ago,”
Butch said.
- Financial disruption causes, ranked:
1.
Education for self and/or
dependent family members (e.g., student debt): 16%
2.
Loss of employment/lower paid
job: 15%
3.
Supporting others financially:
13%
4.
Poor investment/business
performance: 10%
5.
Accident/illness/disability/unable to work: 10%
6.
Divorce/separation/widowed:
10%
7.
Planned family: 9%
8.
Planned home: 8%
- Millennials are the most financially disrupted generation —
they’re the most likely to experience financial disruptions across
nearly every category.
- Supporting others financially is by far the most financially
impactful disruption, resulting in 80% lower median monthly
savings/investments.
The financially disrupted: then (2014) and now (2019)
- Financially disrupted Americans feel more prepared for a
financial disruption in 2019 than five years ago:
- 48% in 2019 had a steady, reliable income vs. 40% in 2014
- 45% in 2019 had money/savings put aside “for a rainy day” vs.
33% in 2014
- 25% in 2019 had to stop saving/investing for the
long-term/retirement vs. 38% in 2014
- 20% in 2019 had to withdraw money from their retirement savings
in 2019 vs. 26% in 2014
- However, more than half of disrupted Americans (56%) are still
behind on their long-term financial goals.
- Financial consequences of disruptions are lasting 33% longer
than five years ago, on average (in 2019, Americans noted that
disruptions lasted six years and three months vs. four years and
eight months in 2014)
The threats ahead
- Looking to the future, Americans most fear increased cost of
living (47%) and healthcare (44%) as threats to their financial
security and long-term investing.
- Millennials consider increased cost of living as the No. 1
threat (44%) to their financial security and long-term investing.
- Gen X (49%) and boomers (51%) worry more about the increased
cost of healthcare.
- Millennials are the most concerned about job loss due to
automation (19% vs. 14% of Gen X and 6% of boomers).
About TD Ameritrade Holding Corporation TD Ameritrade
provides investing services and education to approximately 12
million client accounts totaling approximately $1.4 trillion in
assets, and custodial services to more than 7,000 registered
investment advisors. We are a leader in U.S. retail trading,
executing an average of approximately 1 million trades per day for
our clients, more than a quarter of which come from mobile devices.
We have a proud history of innovation, dating back to our start in
1975, and today our team of nearly 10,000-strong is committed to
carrying it forward. Together, we are leveraging the latest in
cutting edge technologies and one-on-one client care to transform
lives, and investing, for the better. Learn more by visiting TD
Ameritrade’s newsroom at www.amtd.com, or read our stories at Fresh
Accounts. Brokerage services provided by TD Ameritrade, Inc.,
member FINRA (www.FINRA.org) / SIPC (www.SIPC.org)
Source: TD Ameritrade Holding Corporation
About The Harris Poll The Harris Poll is one of the
longest-running surveys in the U.S., tracking public opinion,
motivations and social sentiment since 1963. It is now part of
Harris Insights & Analytics, a global consulting and market
research firm that strives to reveal the authentic values of modern
society to inspire leaders to create a better tomorrow. We work
with clients in three primary areas; building twenty-first-century
corporate reputation, crafting brand strategy and performance
tracking, and earning organic media through public relations
research. Our mission is to provide insights and advisory to help
leaders make the best decisions possible. TD Ameritrade is separate
from and not affiliated with the Harris Poll, and is not
responsible for their services or policies.
Survey Methodology This survey was conducted online
within the United States by The Harris Poll on behalf of TD
Ameritrade from August 8 to 14, 2019, among 1,015 U.S. adults aged
23 and older with at least $10,000 in investable assets. This
online survey is not based on a probability sample and therefore no
estimate of theoretical sampling error can be calculated. The
survey includes: millennials (ages 23-38), Gen X (ages 39-54) and
boomers (ages 55-73). The survey also includes: financially
disrupted (n=536). Financially disrupted are defined as those who
have experienced an event or situation that had a negative effect
on their financial plans for the long/term retirement.
1
https://www.federalreserve.gov/releases/g19/HIST/cc_hist_memo_levels.html
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version on businesswire.com: https://www.businesswire.com/news/home/20200206005098/en/
For Media: Tim Osiecki, 201-369-5908 Corporate Communications
timothy.osiecki@tdameritrade.com @TDAmeritradePR
For Investors: Jeff Goeser, 402-597-8464 Managing Director,
Investor Relations jeffrey.goeser@tdameritrade.com
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