Fed Study Shows Americans Slip in Financial Assets


The poor are getting poorer and the middle is getting lesser, so it stands to reason that their money would be moving out of financial products.

That is in fact happening, according to a report published in The Federal Reserve’s September bulletin. Cash value life insurance is among the assets that slipped in family ownership. In fact, families owned fewer financial assets but had slightly more in transactional accounts, such as checking, according to the study.

Not to darken your day, but the numbers look pretty bleak for the lower and middle class. The look at the report from the Survey of Consumer Finances confirms that the low end is dropping: “Between 2010 and 2013, mean (overall average) family income rose 4 percent in real terms, but median income fell 5 percent, consistent with increasing income concentration during this period.”

The middle class stagnated, but in essence fell further behind because it has not made up for losses in the 2008 crash: “Families in the middle to upper-middle parts (between the 40th and 90th percentiles) of the income distribution saw little change in average real incomes between 2010 and 2013 and thus have failed to recover the losses experienced between 2007 and 2010.”

Cash value life insurance slipped from 19.7 percent of families in 2010 to 19.4 in 2013. That’s not a huge drop but it’s not an increase either. The largest drops were in CDs, down from 12.2 percent to 7.8, and savings bonds, down from 12 to 10, and stocks, down from 15.1 to 13.8.

Although ownership percentage in stocks dropped, the value increased dramatically – probably not a surprise to anybody observing the market’s rise over the past few years. So, that sharpens the point that more families are slipping behind while others leap ahead.

Obviously, American families need help securing a better financial future.




Steven A. Morelli is editor-in-chief for InsuranceNewsNet. He has more than 25 years of experience as a reporter and editor for newspapers, magazines and insurance periodicals. Connect with Steve →

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