Though seasoned financial professionals may be paying more attention to the growing indications that an elusive "soft landing" may indeed be possible for the U.S. economy amid the Federal Reserve's fight against inflation, the reality is that the average working American is deeply stressed about both their personal finances and the state of the U.S. and global economies.
In fact, as noted in a new video posted to the social media platform X by the financial planning expert Jamie Hopkins, director of private wealth management at Bryn Mawr Trust, self-reported well-being has dropped to its lowest level in 12 years, with most Americans citing personal finance-related stressors as the primary contributor to the decline.
In the video, Hopkins points to this and a variety of other findings from Guardian's recently published "Mind, Body, and Wallet" report to warn advisors about the growing potential for falling out of touch with their clients if they fail to look beyond the macroeconomic data and consider clients' lived experiences.
It may be true that markets have rebounded strongly from 2022's lows and that today's retirement-focused investors can build safer and higher-yielding portfolios than at any point in more than two decades. However, that doesn't negate the fact that people are worried about inflation, political divisions, geopolitical tensions and much more.
As the Guardian report notes, these mixed economic and emotional concerns are mounting just when many workers are being asked to return to the office and a traditional work schedule.
"The shift back to in-person has far-reaching effects, many of them stressful," the report warns. "Families' budgets are stretched by commuting costs, childcare arrangements are being upended yet again, and the ability to easily pick up a sick kid from school or take a parent to a routine check-up during the day has diminished."
Perhaps most striking, the report indicates not only that Americans are rating their mental, physical and financial wellness at record lows, but they are doing so following a notable peak in self-reported well-being in 2022.
Causes for Concern
"[Guardian] found that financial stress is at the highest for Americans that it's ever been [in the 12 year course of the study], and that is really concerning," Hopkins says.
Financial stress is higher than ever before!
With so much change how do we approach this? pic.twitter.com/xZ1sTbcgcR
— Jamie Hopkins (@RetirementRisks) November 14, 2023
The finding is a surprise, he says, because "there are a lot of good things going on in this country."
"There's a lot of good things with employment going on," Hopkins says. "But people are stressed and that is real. The perception of what is going on — people are feeling it."
As Hopkins notes, the top three stressors cited in the report are "money and finances," "the economy and inflation," and "debt."
"Even if inflation is getting under control, people are still feeling the impacts of it," Hopkins says. "In the debt world, you saw student loan repayment relief [changing], and people missing those payments. You've seen the total amount of credit card debt hit an all-time high."
