Friday, July 15, 2011

Those with sizable assets worried about deficit

A new study by TNS, the world's largest custom research firm, reveals that 87% of Americans with $500,000 or more in investable assets agree that the size of the US government's deficit is a major concern for them.

Of those surveyed, 40% stated that they would be willing to pay higher taxes if it meant there were no changes to Social Security and Medicare. Forty percent also agreed that in order to balance the federal budget, they would be willing to accept changes to both Social Security and Medicare.

Across the board there is concern and uncertainty around the U.S. economy and how it will affect the financial well-being of Americans.

43% feel the current state of the economy will jeopardize their retirement plans
40% plan to reduce the amount of money they spend compared to last year

Anxiety about the financial health of the U.S. government is also evident, with:

56% agreeing that they are concerned that the US government may default on its debt obligations
60% stating they do not think the US government should increase the federal debt ceiling

TNS also released its latest Investor Confidence Index, which declined in June to 102, its lowest level in a year. This 11 point drop is being driven by growing pessimism about the stock market and the direction of the economy.

"These findings reveal significant stress and discomfort among investors who control the overwhelming majority of the personal wealth in the U.S. We expect investor confidence to decline further if a decision concerning the debt ceiling isn't made ahead of the August 2nd deadline. On the other hand, a satisfactory resolution could raise investor confidence and spur a rise in the financial markets," said Joe Hagan, SVP at TNS.

The survey is part of TNS' Affluent Market Research Program.

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