Financial services firm Empower's March survey of 2,204 US adults revealed that the definition of wealth and happiness is rapidly shifting from earning money to valuing time. Around 63% of the survey respondents would feel wealthy if they got sufficient time with friends and family, and nearly 40% believe saving time is more important than money. More people recognise wealth as saving time for activities that make them happy.
The survey found that Americans, on average, valued their time at $240 an hour or almost $500,000 annually, considering 40 hours of work per week. However, $240 per hour is over eight times the average US salary of $59,852. Millennials significantly contributed to the high average rate as they expected $328.84 for an hour of their time. Furthermore, 25% of the millennials wanted $500 per hour! Empower thinks millennials value their time more because of the economic downturns they have faced in the last two decades, like the 2008 crisis, record student debt levels and mortgage rates that affected the ability to save and buy homes, pushing back their life goals by several years. The survey also highlighted that almost 41% of millennials were ready to take a solid 15% pay cut if it bought them more free time.
Saving Time By Paying Someone To Do Things For Them
Americans are increasingly finding new ways to free up time. The survey found that 36% of those surveyed would pay more to have items delivered home, while 40% believe delegating household tasks enhances work-life balance. One in three millennials would pay someone up to $10,000 annually to take care of their household chores, while Gen Z is willing to shell out $5,000 to avoid tasks like house cleaning. Many people also dislike managing their money, while some procrastinate over paying bills. Over 25% would pay a financial advisor $5,000 yearly to manage their finances, while 21% would leverage AI technology for automatic, timely bill payments, a hands-off investing experience, and household budget creation. These emerging trends among younger generations could mean potential tailwinds for the financial advisory industry and companies that offer AI-powered financial services.
Running Out Of Time To Save For Retirement
Empower found that almost 50% feel they don't have enough time to save for retirement despite many starting retirement planning early. Many would rather retire early for a longer retirement life with less money than work until they are old and have more money. Meanwhile, average 401(k) balances tracked by Fidelity Investments recorded double-digit growth in Q2 2024 to $127,100, driven by strong and consistent contributions by Gen X 401(k) participants.
However, concerns about US jobs, declining wage growth, and elevated living costs pose significant risks to the workforce's ability to save and grow money. The Federal Reserve Bank of Atlanta's wage growth tracker shows that growth rates dropped to 4.7% in July from 6.7% in mid-2022. The US jobs market has also been cooling rapidly as job openings nosedive. US Bureau of Labor Statistics data show job openings in July fell to a three-year low of 7.673 million, well under forecasts of 8.1 million, as layoffs rose by 202,000 to 1.762 million. However, several economists indicated that the latest data doesn't necessarily mean trouble for the labour market and that the immigrant surge could drive unemployment rates.
