Americans Leery of Economy, Personal Finances in 2005;
Financial Survey Finds Dramatic Reversal in Expectations from Prior Year
Uncertainty is all the more reason to Pre-Plan Tax Year
“Many (Americans) are feeling financially squeezed and uncertain about the future."
-- Mark Simenstad, Thrivent Financial's Economic Strategist
Americans' expectations for the U.S. economy in 2005, as well as for their personal financial well-being, are down sharply from a year ago, according to a Thrivent Financial national survey*. More Americans expect the U.S. economy in 2005 to grow worse rather than better (37 percent versus 33 percent), a dramatic reversal from a year earlier when twice as many believed the 2004 economy would grow better rather than worse (47 percent versus 23 percent).
This overall pessimism is also found in Americans' attitudes about their own family income and financial situation. Taking into account their income, savings and investments against financial obligations, some 44 percent say their families will not be financially better off in 2005 than in 2004 (up from 38 percent a year earlier). Those expecting a better family economic situation dropped from 57 percent to 47 percent. This is the lowest level ever recorded since 1997 in Thrivent Financial surveys.
In addition, the number of people expecting their income to decrease in the coming year doubled from a year earlier. Twenty percent expect their total family income to decrease (up from 10 percent a year ago), while only 38 percent expect it to increase (down sharply from the 51 percent recorded last year). Again, this is the lowest level ever recorded in Thrivent Financial surveys.
Those most apt to feel their 2005 financial well-being will diminish include:
· Those separated, divorced or widowed (56 percent),
· Those who never attend religious services (53 percent),
· Pre-retirees age 50-64 (49 percent),
· Those with income of less than $35,000 (49 percent),
· Women (47 percent) and
· Northeasterners (47 percent).
That is the bad news, but here is the good news! Planning can help reverse this pessimism. "While many factors influence our economic futures, we know that those who plan and set financial goals are usually more confident," says Simenstad. "Careful planning can help all Americans make the most of their finances and protect themselves against changing financial circumstances."
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* http://www.wealthlink.com/tradevisionary Family Financial Planning Wealth Builder