A new survey from Primerica finds 71% of middle-income Americans say their income cannot keep up with the cost of living, painting a stark picture of financial stress still gripping millions of families.
The survey also finds 66% of respondents say they have little to no wiggle room in their budgets. More than half have stopped saving for the future, and more than half have also put off medical or dental care — a figure that has jumped 21 points since December.
Despite those pressures, 70% of respondents say they believe they can adapt when financial challenges arise.
Glenn Williams, CEO of Primerica, said the financial strain families are feeling has accumulated over time and does not ease quickly, even when broader economic conditions improve slightly.
"The stress of the cost of living has built up over time, and families are still feeling that," Williams said. "It's not something that can be adjusted, even when things get a little better, as we have seen incomes catching up with the cost of living over the last few months, up until gas prices started working against us. It takes some time to get over the multiple months of challenges that middle-income families have faced over the last few years."
Williams said the survey data on what families are delaying tells the most important part of the story.
"When you look at what they say they are delaying, that's where there's a real story there, because some of those are important priorities of life, whether it be retirement savings or particularly seeing families delay health care," Williams said. "We're in the wealth business, but there are things in life more important than wealth, and your health is one of those things."
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Williams encouraged families not to delay true necessities, and instead look at luxuries they can trim to free up money.
Two-thirds of survey respondents said they do not think they are saving enough for retirement. Williams said pausing savings carries a steep long-term cost.
"The delays are very costly as your accumulation has time on its side," Williams said. "When you start delaying, it really, really hurts because you don't have the time to accumulate what you need."
He said families need to make tough decisions about priorities and find a way to begin saving for retirement as early as possible.
As more households turn to credit cards to cover basic needs, Williams said high interest rates make that debt especially dangerous.
"It's not just debt. It's high interest rate debt," Williams said. "Almost every family does have money falling through the cracks in their budget, even though they may not feel it or realize it. And if we can find those dollars, put them toward paying off that high interest rate debt and getting some type of savings plan started for the future as well as protecting their family's income with term insurance."
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Williams said he will be watching household income growth relative to the cost of living over the next 6 to 12 months as a key indicator of whether middle-income families will find relief. He noted that progress on that front had been disrupted by rising gas prices.
"I think it's watching the cost of living versus their income," Williams said. "And then anytime there's a little breathing room — and there's not gonna be much, but there could be a little — is trying to deploy that margin in a way that families can prepare for the future and protect their families."
