AARP research found that 33% of adults age 30 and older said their financial situation is worse than it was a year ago, up from 22% in January. And 35% of adults age 65 and older said their financial situation is worse, up from 13% in January – a 169% increase.
A significant majority of adults age 30+ (78%) said they have adjusted their lifestyle or shopping habits due to inflation. Nearly half (49%) of women and 41% of men reported cutting back on basic expenses such as food and transportation, while 53% of women and 46% of men reported cutting back on “extras.” These cuts, combined with a slowdown in consumer spending and the recent decline in consumer confidence, could translate to less spending this holiday season.
Growing debt could also contribute to a potential decrease in holiday purchases. The AARP survey found the average amount of credit card debt in July was just over $7,100, with more people attributing their credit card debt to everyday expenses in July (42%) than they did in January (35%). Roughly 4 in 10 respondents said their debt is unmanageable.
“Consumers of all ages are feeling the impact of inflation. Many living on a fixed income have had to cut back on basics, while others have struggled with debt or delayed their retirement plans altogether,” said Gary Koenig, vice president of financial security at AARP. “Rising prices not only impact consumer spending, it makes managing debt and saving for the future a steeper hill to climb.”
Additional findings include:
• Large, unexpected expenses are the type of expense that cause the most worry, with 62% of adults expressing concern. And 45% are worried about affording basic expenses, up from 38% in January.
• Women were more likely than men to be worried about both large, unexpected expenses and basic expenses.
• Among adults age 50 and older, 1 in 5 (21%) expect their financial situation to decline over the next year.
• Among those who are not yet retired, more than half (52%) expect to either work in retirement or to never retire. Of those who expect to work in retirement, 3 in 4 (74%) cite financial reasons.
AARP’s Financial Security Trends Survey examines how adults age 30 and older view their financial situation, including their ability to cover expenses, manage debt and build savings for emergencies and retirement. This semiannual survey compares findings from July 2022 to those from January 2022.
To view the full survey results, visit aarp.org/financialtrends.