If there is one financial lesson Americans have taken away from the pandemic, it's that they need to plan for their financial future. And according to research by Lincoln Financial Group, that message could not have been clearer for African Americans who were hit hardest with job loss.
The October Consumer Sentiment Tracker, which included 4,240 adults, found that 32% of Black Americans experienced job loss during the pandemic, compared to 25% of Hispanics, 15% Asians and 13% white Americans.
The research shows that Black Americans are more concerned about being able to cover immediate expenses. In fact, they cited not having enough emergency savings (42%) and not being able to cover day-to-day expenses (41%) as their top financial concerns.
The research also noted that the pandemic has shifted the mindset of Americans in how they plan for the future. But more Black Americans agreed that they are thinking and planning for the future differently as a direct result of the pandemic. Nearly three-quarters (74%) of Black consumers indicated that they are planning to make permanent changes to the way they spend and save. Seventy-five percent also are thinking and planning for their financial future differently.
Further, the research shows that Asians (70%) and Black Americans (67%) are most likely to express an appetite for planning support, information, education and advice, making them key targets for financial planning services.
Black consumers also are more likely to think now is a good time to purchase a financial product that protect their investments against market downturns (28%) and offers protected lifetime income (31%). They also are interested in purchasing a long-term care insurance policy (26%), increasing coverage on an existing life insurance policy (26%) and purchasing a new life insurance policy (24%).
And while stress and anxiety levels remain high for all Americans when it comes to financial planning, the research found that Black consumers expressed the highest level of positive feelings. More than a quarter (28%) reported feeling hopeful, 22% said they are interested in financial planning and 17% indicated being opportunistic. They also indicated that they prefer to learn about financial products by seeking out advice from a financial professional (39%) followed by financial services companies (28%).
Eric D. Bailey, founder of Bailey Wealth Advisors in Silver Spring, Md. and a registered representative of Lincoln Financial Advisors, said while it is good news that more Black Americans are feeling optimistic, the research also indicates there is still work to be done. “Unfortunately, the wealth gap for African Americans remains significant,” he said.
In order to build wealth and achieve the retirement they envision for themselves and their families, Bailey recommends that all Americans focus on education and financial literacy from a young age, make longevity planning a priority and meet with a financial professional.