Schwab recently released its 2021 Modern Wealth Survey, an annual examination of how 1,000 Americans think about savings, spending, investing, and wealth.
Two things stood out in the survey. First, Americans significantly revised their views downward since last year on what it takes to be wealthy, achieve financial happiness, and be financially comfortable. This might be expected in the post-pandemic period as many people may have shifted their priorities to those less dependent on wealth. Despite these lower numbers, many people still do not make the cut. According to the Fed’s Survey of Consumer Finances, more than 75% of households in the U.S. fall below the $624,000 mark for financial comfort, not surprising as the median net worth in the U.S. is just $121,000. Even most older households in the 65+ range are relatively financially uncomfortable with a median net worth of less than $266,000.
The second notable finding was the marked difference between those respondents that had a financial plan and those that did not. Planners and non-planners appear to think and act differently when it comes to their finances. Planners appear to be more financially stable and knowledgeable as shown below:
The Survey also showed that only a third of Americans had a financial plan in writing. The most often cited reason for not having a plan is the belief that there are not sufficient assets to merit a formal plan. This represents a significant gap and opportunity for advisors serving the mass market and mass affluent segments.