American Consumers Newsletter

by Cheryl Russell, Editorial Director, New Strategist Press
May 2013

The Retirement Problem




To see Cheryl Russell’s Demo Memo blog, click here.

1. Hot Trends 

The Retirement Problem     

Nearly half of American households have saved nothing for retirement, according to a Congressional Research Service analysis of the 2010 Survey of Consumer Finances (U.S. Household Savings for Retirement in 2010, by John J. Topoleski, April 30, 2013). Among the nation’s 118 million households, 58 million (49.6 percent) have no retirement savings (defined as a defined-contribution plan and/or IRA). Another 40 million (33.9 percent) have $100,000 or less in retirement savings. That leaves just 19 million households (16.5 percent) with more than $100,000 saved for retirement.


Cracking the Retirement Nest Egg

Why can’t Americans save more for retirement? That’s the question asked by the Federal Reserve Board in an analysis of early withdrawals from retirement accounts. Perhaps early withdrawals are the problem, the Fed researchers suggest. We can’t save much because we won’t leave our nest eggs alone, cracking into them early–before age 59.5. Taking an early withdrawal from a retirement account is something most people would prefer to avoid because it’s taxable and a 10 percent penalty is levied on it as well. Given the disincentives, it is reasonable to assume (and the Fed researchers show) that those who take early withdrawals are experiencing financial hardship. But how common is it to crack open the nest egg?


By examining tax returns, the Fed researchers estimated the frequency of early withdrawals from retirement accounts and their size relative to retirement contributions. Both figures are disturbingly large. Among taxpayers under age 55 with a retirement account in 2010, nearly one in four (23.8 percent) took an early withdrawal. To determine whether the effects of the Great Recession were behind this high rate of withdrawal, the researchers looked at rates in earlier years. Much to their surprise, early withdrawal was common well before the Great Recession. In 2004, 21.2 percent of retirement account owners under age 55 took an early withdrawal. In 2007, the figure was 22.2 percent.


Relative to retirement contributions, early withdrawals loom large. In 2004, early withdrawals from retirement accounts accounted for 30 percent of contributions made that year. By 2010, the figure had grown to 45 percent. With nearly half of our retirement contributions being withdrawn early, it’s no wonder our nest eggs aren’t growing.


Retirement Expectations   

Many baby boomers plan to work well into their sixties to save more for retirement, but those plans may not work out. Among current retirees, the largest share (47 percent) had to retire sooner than expected, according to the Employe Benefit Research Institute (The Retirement Expectations Gap). A smaller 43 percent retired as planned, and 6 percent retired later.


Middle Age Worries 

Recently, Gallup researchers asked a representative sample of Americans how worried they are about their finances. What they heard from middle-aged Americans is worrisome.


In some ways, the concerns of people aged 50 to 64 are typical, such as the 72 percent who are “very” or “moderately” worried about not having enough money for retirement. Of course this is a prime financial worry–no surprise there. And it’s also no surprise that only 29 percent are worried about paying for their children’s college education. Most have already settled that issue one way or the other.


But here’s the worry about worries: The 51 percent majority of people aged 50 to 64 are very or moderately worried about being able to pay the costs of normal health care (higher than any other age group), 44 percent are worried about being able to pay normal monthly bills (higher than any other age group), 39 percent are worried about being able to pay the mortgage or rent (equal to younger age groups), and 22 percent are worried about making the minimum payments on their credit card bills (higher than any other age group). These are the kinds of financial worries that should be in midlife’s rearview mirror. But they aren’t. And that’s worrisome.


Trouble Ahead for Boomers?  

As they approach old age, baby boomers are more disabled than their predecessors. This finding might surprise some, steeped in the pervasive myth that boomers are active and healthy relative to older generations. But to researchers writing in Demography, “the finding that activity limitations have increased over the last decade among those nearing late life is not new” ( “Trends in Late Life Activity Limitations,” Demography, April 2013, $).


Specifically, people aged 55 to 64 are experiencing more health-related activity limitations than their counterparts did ten years earlier, report the Demography researchers. A new study by MetLife Mature Market Institute (On the Critical List? A MetLife Report on the Health Status of the 40+ Population) examines this problem, drawing on government data that show a growing percentage of 45-to-64-year-olds with multiple chronic conditions. Even more ominously, the chronically ill are increasingly likely to delay getting medical care because of cost. Those who delay getting care often end up needing more care at greater cost as their condition worsens. “Overwhelmingly,recent health status statistics are indicators of a potential health ‘train wreck’ in the near future.” concludes the MetLife study.


Hard Times after High School

Among the 3.2 million young people who graduated from high school in 2012, a substantial 1.1 million did not enroll in college. The Bureau of Labor Statistics recently examined the labor force status of 2012 high school graduates. This is the unemployment rate as of October 2012 of those who had not enrolled in college…


Total: 34.4%

Men: 37.5%

Women: 29.9%


SSA Stats: Baby Bust Continues

For the past few decades, the IRS has required parents to provide Social Security numbers for dependent children on their tax returns. Since then, all newborns in the United States receive Social Security numbers, and applications for numbers by year of birth closely track actual births. While the Social Security Administration’s numbers are not exactly the same as the complete count of births provided by the National Center for Health Statistics, they are available sooner and are an excellent indicator of trends in births.


The latest statistics show that the baby bust continues. In 2012, the Social Security Administration provided 3,931,200 numbers for newborns. This was 19,502 fewer than in 2011 and 393,000 below the peak year of 2007. Although the baby bust is ongoing, the decline is slowing. The biggest drop (-133,499) occurred between 2009 and 2010.


Births Outside of Marriage

Out-of-wedlock childbearing is approaching the norm in the United States today. According to the National Center for Health Statistics, 47 percent of the nation’s fathers and 49 percent of the nation’s mothers under age 45 have had a child outside of marriage.


Student Debt Has Consequences  

Student loans are crowding cars and homes out of the lives of young adults, according to a Liberty Street Economics analysis by Meta Brown and Sydnee Caldwell of the Federal Reserve Bank of New York.


In their analysis, Brown and Caldwell track the decline of mortgage debt held by 30-year-olds and auto debt held by 25-year-olds. Both have plunged, particularly among young adults with student loans. In fact, young adults with student loans are now less likely to have either mortgage or auto debt than those without student loans–a reversal from the pattern prior to the Great Recession.


Young adults with student loans have been shedding other debt as their student loans grow. Between 2003 and 2012, the percentage of 25-year-olds with student loan debt climbed from 25 to 43 percent, and the average amount owed grew from $10,649 to $20,326. But the refusal–or (perhaps more important) inability–of these 25-year-olds to buy cars and houses has resulted in a decline in their other debt. This decline has been greater than the increase in their student loans. Consequently, 25-year-olds with student loans reduced their overall debt by $5,687 between 2008 and 2012. That’s good news for them, but bad news for the nation’s automotive and housing industries.

Renting and the American Dream

Sixty-one percent of the American public thinks renters can be as successful as homeowners at achieving the American Dream, according to a MacArthur Foundation survey. The survey’s findings document the growing appeal of renting–despite the fact that most renters still want to become homeowners.


The 54 percent majority of the public says renting has become more appealing over the past few decades. It has become so appealing, in fact, that 45 percent of current homeowners would consider renting in the future. Those most likely to consider renting are young (53% of homeowners aged 18 to 34), highly educated (53% of homeowners with a postgraduate education) and affluent (51% of homeowners with a household income of $75,000 or more).


Why Young People Don’t Vote

Early last year, I predicted a decline in voter participation among young adults in the 2012 presidential election (The Surprising Trends that Suggest Young People Won’t Vote in 2012, New Republic). Was I right or what? Here are the voting rates of citizens by age group (and the percentage point change in the rate between 2008 and 2012)…


18 to 24: 41.2% (-7.3)

25 to 44: 57.3% (-2.7)

45 to 64: 67.9% (-1.3)

65-plus: 72.0% (+1.7)


The voter participation rate of 18-to-24-year-olds plunged between 2008 and 2012, according to the Census Bureau. While the overall rate fell by 1.8 percentage points (to 61.8 percent), the rate among young adults fell by an enormous 7.3 percentage points. One reason for the decline is the typical lower level of enthusiasm for an incumbent. The second and more important reason is that voting is for grown ups, and millions of young adults have been prevented from growing up by the lingering effects of the Great Recession. Voting rates rise steadily with age as young adults find jobs, earn a living, set up house, marry, and have children–in other words, as they become established members of the community. By these measures, fewer young adults were grown ups in 2012 than in 2008. The decline in their voter participation rate was predictable, and predicted.


These are a sampling of posts published in the past few weeks in Cheryl Russell’s Demo Memo blog. Please send questions or comments to


Householders aged 35 to 44 are the biggest spenders on mortgage interest, paying 58 percent more than the average household for this item.


2. Q & A

Are Americans Buying More Guns?   

True or false: Americans are buying more guns. Trying to determine whether that statement is fact or fiction is not easy. Gun manufacturers say sales are soaring, while surveys show a shrinking proportion of households with guns.


One way to determine whether Americans are buying more guns is by examining the Bureau of Labor Statistics’ Consumer Expenditure Survey, which captures household spending on guns and ammunition in the spending category “hunting and fishing equipment.” Although hunting and fishing equipment includes rods and reels, bait and tackle, and bows and arrows as well as guns and ammunition, an analysis of trends in the category is revealing.


Average household spending: Between 2000 and 2011, average annual household spending on hunting and fishing equipment fell slightly, from $33.77 to $33.06 (in 2011 dollars). During those 11 years, spending on the category peaked in 2002 at $44.61 and bottomed out in 2010 at $27.00. There has been no upward trend in average household spending on hunting and fishing equipment.


Percent of households buying: The Consumer Expenditure Survey also collects information on the percentage of households that make purchases during an average quarter. During an average quarter of 2000, for example, 2.20 percent of households spent money on hunting and fishing equipment. This figure fell as low as 1.83 percent in 2007. In 2011, however, it was at an 11-year high of 2.80 percent. There has been an upward trend in the percentage of households buying hunting and fishing equipment.


Best customers: Non-Hispanic whites spend 17 percent more than the average household on hunting and fishing equipment, making them the “best customers” of the category. In fact, they are the only race/Hispanic origin group that spends more than average on these items. Black households spend 44 percent less than average on hunting and fishing equipment, Hispanic households spend 68 percent less, and Asian households spend almost nothing on the category. The percentage of non-Hispanic white households purchasing hunting and fishing equipment during an average quarter has grown steadily in recent years: 2.26% in 2007; 2.55% in 2008; 2.80% in 2009; 2.98% in 2010; and 3.40% in 2011. The best customers of hunting and fishing equipment are becoming even better customers.


Are Americans buying more guns? This analysis suggests that some may be.


During an average week, 7 percent of households headed by 55-to-64-year-olds spend on lotteries and gambling–a larger share than any other age group.


3. Cool Research Links

To keep up-to-date on ever-changing demographics and lifestyles, check out these useful links.


At this link you can see the results from last November’s Current Population Survey, which asked Americans whether they had voted in the 2012 presidential election. Reported voting and registration are shown by age, sex, race and Hispanic origin, and other demographic characteristics. In 2012 for the first time, blacks voted at a higher rate (65.9%) than non-Hispanic whites (64.1%). Only 48 percent of voters were non-Hispanic whites aged 45-plus, evidence of the declining political power of older whites.


Homeownership in 2013

The first estimates of homeownership in 2013 were released by the Census Bureau a few weeks ago and are available at this site. The overall rate fell to 65.0 percent in the first quarter of 2013. The quarterly homeownership rate hasn’t been that low since the third quarter of 1995. Although the overall rate was the same in both time periods, most age groups are less likely to own a home in 2013 than in 1995. The aging of the population is all that has kept today’s rate from falling below the 65-percent threshold.


New Occupations

Every few years the federal government updates its occupational classification system–the one that produces estimates, for 821 detailed occupations, of the number of workers and their earnings. The government creates these estimates for the nation as a whole and for states and metropolitan areas. At this link you can access the latest update and see the list of 24 new occupations, including fundraisers, web developers, genetic counselors, solar photovoltaic installers, and wind turbine service technicians.



The Connectivity Continuum  

Twenty-seven percent of Americans are highly connected to the Internet, accessing the Internet at multiple locations with multiple devices. Another 16 percent of Americans are not connected at all to the Internet, lacking any kind of computer or Internet use. These are the two extremes of what the Census Bureau calls the “connectivity continuum,” with everyone else at various stages of connectivity in between (home-only connectivity, single-device connectivity, etc.). At this link you can access the Census Bureau report, Computer and Internet Use in the United States: 2011. The report is admittedly dated, but it captures an historic moment–the transition from pre- to post-Internet age when connectivity sharply divided the population. The highly connected and the unconnected were the two largest segments of the population in 2011.


The best customers of new cars are married couples without children at home, most of them empty-nesters. This household type accounts for more than one-third of the new car market.

Who buys? What do they buy? How much do they spend? Get the dollar-for-dollar answers you need for business success in today’s competitive economy from these one-stop resources. You can’t get these data online!


Looking for customers? Repositioning your products? Americans are still spending money, but only those who are on top of the trends will know who the spenders are. The just-published 17th edition of Household Spending: Who Spends How Much on What reveals who is spending and the products and services they buy. New to this edition are comparisons of spending before (2000-06) and after (2006-10) the Great Recession.


The annual spending data in Household Spending, the first edition of which was published more than twenty years ago in 1991, allow you to compare and contrast spending by a host of demographic characteristics. With this vital information, which is not available online, you can determine market potential, identify your best customers, and understand which segments account for the largest share of spending. You get the answers by the demographics that count–age, income, high-income households, household type, region of residence, race and Hispanic origin, and education.


You can see the book’s introduction, table of contents, index, and sample pages at, where you can also download this unique reference tool as a PDF linked to Excel spreadsheets of all data tables

Hardcover: $125.00 (978-1-935737-12-2) 612 pages

Paper: $94.95 (978-1-935737-13-9)


The new edition of American Buyers presents 2010 spending data in a groundbreaking guide to buying patterns–essential information in these difficult economic times.


While most businesses have a feel for what’s happening in their own establishments, American Buyers lets them see the big picture beyond their walls or website. The unique weekly and quarterly spending data, which are not available online, show the percentage of households that buy individual products and services and how much the buyers pay for them. American Buyers reveals the percentage of households that buy fast-food lunches during an average week, for example, and how much the buyers spend on them. It reveals the percentage of households buying airline tickets during an average quarter and how much the buyers spend on them. Even better, these vital spending data are detailed by the demographics that count– age, income, high-income households, household type, region of residence, race and Hispanic origin, and education.


You can see the book’s introduction, table of contents, index, and sample pages at, where you can also download this unique reference tools as a PDF linked to Excel spreadsheets of all data tables.

Hardcover: $125.00 (978-1-935775-98-0) 396 pages

Paper: $94.95 (978-1-935775-99-7)
Best Customers: Demographics of Consumer Demand, 9th edition

Find out how the American marketplace has been transformed by the Great Recession in this new edition of Best Customers: Demographics of Consumer Demand, with all-important 2010 spending data.


In Best Customers, experts and novices alike can see at a glance who spends the most and who controls the largest market share–often surprisingly different–on over 300 products and services organized into 21 chapters such as Entertainment, Groceries, Computers, Telephones, etc.–everything a consumer might buy. Based on unpublished data–you can’t find this on the Internet–from the Bureau of Labor Statistics’ valuable Consumer Expenditure Survey, Best Customers brings you insight into household spending by the demographics that count–age, income, household type, region of residence, race and Hispanic origin, and education. Each product table is accompanied by text that identifies the best customers, analyzes spending patterns, describes spending trends before and after the Great Recession, and predicts future trends based on changing demographics.


You can see the book’s introduction, table of contents, index, and sample pages at, where you can also download this unique reference tool as a PDF linked to Excel spreadsheets of all data tables.

Hardcover: $120.00 (978-1-937737-10-8) 810 pages

Paper: $89.95 (978-1-937737-11-5)
Who’s Buying Series

Get the demographics you need to target your markets with the 14-volume Who’s Buying Series, which can be purchased individually or as a set. Each volume gives you the facts about consumer spending by age, income, household type, race and Hispanic origin, region of residence, and education. To round out the spending picture, you also get who-are-the-best-customer analyses of the data. These new editions are must-haves updated with 2010 data and reveal spending trends before (2000-06) and after (2006-10) the Great Recession product by product. TheWho’s Buying Series includes Alcoholic & Non-Alcoholic Beverages; Apparel; Entertainment; Groceries; Health Care; Household Furnishings, Services, and Supplies; Information and Consumer Electronics; Pets; Restaurants; Transportation; Travel; and Who’s Buying: Executive Summary, Who’s Buying by Age, and Who’ Buying by Race and Hispanic Origin.


You can see the introduction, table of contents, index, and sample pages of each volume in the Who’s Buying Series at, where you can also download these unique reference tools as PDFs linked to Excel spreadsheets of all data tables. Individual reports: $59.95; 14-volume series: $750.00.

For your convenience, all of New Strategist’s titles are available as searchable single- and multiple-user PDFs linked to spreadsheets of each data table so you can do your own analyses and create PowerPoint presentations.


During an average week, 61 percent of households headed by Hispanics buy fresh fruit at the grocery store, more than any other racial or ethnic group.