Part of the Political Issues and Policies Special Report
Based on the election coverage, you might think Republicans and Democrats disagree about everything. Turns out, that’s not the case when it comes to their money, according to personal finance surveys out today from Lincoln Financial Group and CreditCards.com.
Sure, when it comes to the U.S. economy, Republicans tend to think things are pretty lousy and Democrats typically believe they’re pretty good (see this recent Gallup survey). But it’s a different story for their personal financial outlook, retirement views and debt and spending habits.
“In this election year, we were a little pleasantly surprised how much unity there was in their approach to retirement,” said Jamie Ohl, president of retirement plan services at Lincoln Financial Group. “92 percent of both Democrats and Republicans said they don’t want to work in retirement. That was a driving force behind their unity.”
The Lincoln Financial Group Survey
Some other findings from Lincoln’s 2016 M.O.O.D. of America poll of 2,267 adults (the acronym stands for Measuring Optimism, Outlook and Direction, of course):
Only 26 percent of Democrats and 25 percent of Republicans think they are managing very well planning for retirement.
Members of both parties are optimistic about their finances. The survey found that 83 percent of Democrats and 80 percent of Republicans feel optimistic about their financial future. This echoes the Associated Press-NORC Center for Public Affairs Research May 2016 survey, where 66 percent of Americans described their personal finances as good.
They think they’re just OK managing day-to-day finances. Just four in 10 Democrats and Republicans (38 percent and 39 percent respectively) say they are managing very well when it comes to financial planning and budgeting. In the AP-NORC survey, two-thirds of Americans said they’d have trouble immediately paying an unanticipated bill of $1,000.
They’re struggling to save for the future. A full 68 percent of Democrats and 70 percent of Republicans say the payments they need to make now make it hard to plan or save. “That’s a universal obstacle across all generations,” said Ohl. “For Millennials, the number one issue day-to-day is student debt. For boomers, it could be paying for college for their children.”
And they’re not planning for the future very well. Only 26 percent of Democrats and 25 percent of Republicans think they are managing very well planning for retirement. And just 27 percent of Democrats and 33 percent of Republicans think they are managing very well planning for their family’s future.
“The challenge is how to better educate individuals to leverage their desire to provide for their families and overcome obstacles,” said Ohl.
They also find dealing with their retirement plans overwhelming. A stunning 68 percent of Democrats and 70 percent of Republicans said that trying to understand their retirement plan options “can be an overwhelming process.”
Ohl said the financial services industry needs “to make it easier for people to understand how to turn their retirement plans into a stream of income to last their lives.” In a blog post I wrote earlier this week, I noted that only a minority of large and medium-size companies with 401(k) plans currently let employees turn their accounts into annuities when they retire.
I was a little surprised to see the huuuuge percentage of Republicans and Democrats telling Lincoln that they don’t want to work in retirement. Other surveys I’ve seen show sizable percentages of workers saying they expect to work in retirement.
“The words in the surveys are important,” said Ohl. “In our survey, 92 percent said they don’t want to have to work in retirement.” In other words: they want the choice, not a requirement.
The CreditCards.com survey of 1,000 adults also found strikingly similar views about debt, credit cards and spending when polling Clinton supporters and Trump supporters. (CreditCards.com Senior Analyst Matt Schulz told me the percentage differences between the camps were too small statistically to be meaningful.)
“We were shocked when we saw these results,” Schulz said. “So much has been made of the differences between Trump and Clinton supporters and we went into this survey expecting to see significant differences in the way they handled credit cards. It just didn’t appear.”
The CreditCards.com Survey
Highlights from the CreditCards.com survey:
Only about half of each group owe credit card debt (51 percent of Clinton supporters and 55 percent of Trump supporters). The rest pay off their balances in full or don’t have credit cards. “Since the recession, we’ve seen a gradual, but apparent, trend towards more people paying off their balances at the end of the month,” said Schulz.
Most have at least one credit card (64 percent of Clinton supporters and 69 percent of Trump supporters). Both groups have an average of roughly three cards apiece.
About a third have paid credit card bills late (34 percent of Clinton supporters and 28 percent of Trump supporters). And roughly 15 percent of both groups have paid them late in the past two years.
Mobile payment services such as Apple Pay? No thanks. “Most data show that Trump supporters are a little older than Clinton’s, so you might think that Clinton supporters would be more likely to use mobile payment services like Apple Pay,” said Schulz. Nope. CreditCards.com found that 78 percent of Clinton supporters and 80 percent of Trump supporters never use the services. They’d rather whip out credit cards, debit cards, cash or, increasingly rarely, a checkbook.
And regardless of which candidate they favor, Americans prefer cash-back credit cards over airline-miles cards. In the survey, 70 percent of Clinton supporters and 73 percent of Trump supporters said they favor cash-back cards. Just 20 percent of Clinton supporters and 12 percent of Trump supporters favor airline-miles cards.
“That’s one thing pretty much everyone agrees on in every survey we’ve ever done,” said Schulz. “Everyone loves cash back when it comes to rewards.”
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