Twenty Key Personal Finance Events of 2018

As 2018 winds down, it is useful to review research, events, and trends that took place and predictions for the future. I recently presented a webinar for the eXtension Military Families Learning Network titled 2018 Personal Finance Year in Review. Below are 20 highlights:

• Support to Adult Children- A 2018 study found that four of five parents provide some type of support to adult children, twice as much money as they save for retirement.
• Retirement Confidence- The 2018 Retirement Confidence Survey found that 64% of workers reported that they or a spouse had saved money for retirement; 45% had less than $25,000 saved.
• The Power of Working Longer- 2018 research found working 3-4 years more increases sustainable retirement income by 24%-33%; for older workers age 50+, it is more powerful than saving more.
• Retirement Income Illustrations- A 2018 study found that 48% of retirement plan participants increased their contributions after seeing their estimated monthly income (55% for millennials).
• Financial Health- According to the inaugural U.S. Financial Health Pulse study by the Center for Financial Services Innovation, only 28% of Americans are financially healthy.
• Household Borrowing- Total U.S. consumer debt reached $13.3 trillion in mid-2018 and is higher than before the 2008 financial crisis.
• Financial Fragility- The 2018 Federal Reserve SHED study found that 3 in 10 adults have volatile family incomes and 4 in 10 could not cover an unexpected $400 expense without borrowing money.
• Low Birth Rate- The lowest U.S. birth rate ever was reported in 2018, with financial implications for baby boom generation “wannabe” grandparents and home sellers.
• Low Unbanked Levels- 2018 saw a record low number of Americans without a bank account; 6.5% of U.S. households were unbanked vs. 8.2% in 2011. About 19% of households are underbanked.
• Surge in Personal Loans- Personal loans surged as the fastest-growing U.S. consumer-lending category. Over a third (36%) of these loans were originated via financial technology companies.
• A Rise in Sports Betting- A May 2018 Supreme Court decision allowed sports betting and it has surged in states that allow it.
• All Time High Car Payments- The average monthly loan payment for a new car hit an all-time high of $523, the average loan amount was $31,453 and the average loan length was 5 years, 9 months.
• Older Adult Bankruptcies- The rate at which Americans 65+ are filing for bankruptcy has more than tripled since 1991. Filing rates are rising for older Americans and falling for younger people.
• Rampant Identity Theft- A record 16.7 million Americans were identity theft fraud victims in 2017. For the first time ever, Social Security numbers were compromised more than credit card numbers.
• Low Unemployment- An unemployment rate of 3.8% in May 2018 was the lowest since 1966 and a sign of a strong economy and a tight labor market. In November 2018, it was 3.7%.
• Social Security Tipping Point- Program costs exceeded income in 2018 for the first time since 1982, forcing Social Security to dip into its nearly $3 trillion trust fund.
• Post-TCJA Tax Planning- 2018 is the first year that Americans will file taxes following passage of the Tax Cuts and Jobs Act. There are concerns that some people will have inadequate tax withholding.
• Rise in State Savings Plans- Almost a dozen states took steps to establish state-sponsored savings plans for workers in small businesses with Roth IRAs funded by employees via payroll deductions.
• New Medicare Cards- New Medicare cards with unique identifying numbers, instead of Social Security numbers, started to be mailed out in April 2018 in an effort to combat identity theft.
• Anniversary Milestones- 2018 marked the 25^th anniversary of exchange-traded funds (ETFs), the 20^th anniversary of Roth IRAs, and the 10^th anniversary of the 2008 financial crisis and bitcoins. It was also the 40^th anniversary of the establishment of 401(k) retirement savings plans.