Tags: Survey | Middle Class | Struggling | Recovery

Survey: Middle Class Still Struggling Despite Recovery

By    |   Sunday, 02 March 2014 03:59 PM

The American middle class continues to struggle despite the economic recovery, a new survey reveals.

Nearly two-thirds (63%) of participants in the Consumer Federation of America survey said they were making only "fair" or "no" progress toward meeting their savings needs. Only about one-third (35%) said they were making "good" or "excellent" progress.

"Only about one-third of Americans are living within their means and think they are prepared for the long-term financial future," said CFA Executive Director Stephen Brobeck. "One-third are living within their means but are often not prepared for this long-term future. And one-third are struggling to live within their means."

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Even though joblessness has fallen, unemployment and underemployment remain elevated. More importantly, real wages have been stagnant, and few middle class families are building wealth through home ownership, the CFA said.

Slightly over half of the survey respondents (54 percent) said they are building home equity in a home or other property, a sharp drop from 68 percent accumulating home equity in 2010. The proportion of home owners expecting to pay off their mortgage before retiring dropped from 78 percent in 2010 to 68 percent.

Savings may be falling because fewer people have savings plan, the group reasons. Those with a "savings plan with specific goals" dropped from 55 percent in 2010 to 54 percent in 2013 to 51 percent in 2014.

The survey revealed pronounced differences between lower middle class families, those with incomes from $25,000 to $50,000, and middle and upper middle class households. Differences between middle and upper middle class families are smaller.

For instance, 63 percent of lower middle class families said they have sufficient emergency funds, compared with 82 percent and 85 percent respectively for middle and upper middle class families.

A recent BankRate.com survey indicates that almost one in four Americans (23 percent) have more credit card debt than emergency savings. Just over half (52 percent) have more in emergency funds than credit card debt.

About one in five (19 percent) lack debt and savings. That's a precarious existence that puts them one unplanned expense away from a payday lender or pawnshop, said Greg McBride, BankRate.com senior financial analyst.

"With more than 6 million Americans out of work longer than six months, the need for emergency savings has never been greater," McBride said. "Many people still have a lot of work to do in paying down credit card debt and accumulating an adequate savings cushion."

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The American middle class continues to struggle despite the economic recovery, a new survey reveals.
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2014-59-02
Sunday, 02 March 2014 03:59 PM
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