The Survey of Household Economics and Decisionmaking, (SHED) echoes other surveys showing that Americans feel glum about the economy and their finances.
The Federal Reserve has been using SHED as a tool for ten years and the 2022 data indicated a decline in financial well-being over the previous year. The survey found that self-reported financial well-being fell sharply and was among the lowest observed since 2016.
SHED is an online survey of a nationally representative sample of 11,667 adults over the age of 18. Participants without access to a computer or the Internet were recruited and provided a laptop to access the Internet and complete the survey. Respondents are asked about their overall financial well-being, income, employment, ability to handle emergency expenses, and living arrangements, among other things.
Key findings in this year’s report included these specific areas:
- Overall Financial Well-Being
- Income
- Employment
- Expenses
- Banking and Credit
- Housing
- Higher Education and Student Loans
- Retirement and Investments
Retirement savings goals did not go well in 2022. Thirty-one percent of non-retirees thought their retirement savings plan was on track, down from 40 percent in 2021.
Retirement savings have implications for financial well-being later in life. Seventy-nine percent of retirees said they were doing at least okay financially. However, retirees who received income from sources such as wages, pensions, or investments were much more likely to be doing at least okay financially than those who had no private income.
Life events contributed to the timing of retirement for a substantial share. Many indicated multiple factors contributed to their decision about when to retire. Fifty-one percent of retirees said a desire to do other things or to spend time with family was important for their decision to retire, and 47 percent said they retired because they reached a milestone for retirement eligibility.
Health issues were responsible for about 30 percent of the retirees in selecting retirement and 17 percent said they retired in part to care for family members. One in 10 said they were forced to retire or that work was not available. Health problems, caring for family, and lack of work collectively contributed to the timing of retirement for 46 percent of retirees.
Defined contribution plans such as the Thrift Savings Plan or 401(k) accounts were the most prevalent method of saving for retirement. Most of the adults between the ages of 18 and 44 participating in the survey didn’t have any form of retirement savings.
