Middle Class Feels Squeeze as Financial Insecurity Climbs: AARP Survey

“This trend also reflects a growing sense of economic unease even among higher-income people,” Johnson says. “The volatile stock market and questions about job stability have made it harder for many families to feel secure, even if they have good incomes.”

For older adults, a financial setback can hit especially hard, Johnson says.

“Families without savings are often one job layoff, major repair bill or serious illness from falling deep into debt,” he says. “It can take them years to regain a sense of financial stability. That kind of financial shock can be especially debilitating for people in their 50s and early 60s, because it leaves them less able to put money away for their retirement.”

Citing the AARP survey, Nancy LeaMond, AARP’s chief advocacy and engagement officer, says 6 in 10 Americans 50-plus worry about being financially secure in retirement. Not surprisingly, the survey found that economic anxiety is strongly correlated with retirement savings: Among adults who are not yet retired, 60 percent of those who feel financially secure have at least $100,000 saved, compared with 17 percent of those who feel insecure.

Among Americans 50 and older who are not yet retired, 42 percent have less than $50,000 saved, the report found. “Considering that retirement today can last 20 or even 30 years, these numbers just don’t add up,” LeaMond says.

Key factors for financial security

What distinguishes people who feel financially secure from those feeling financial stress? Income matters, but it is not the whole story. Here are some of the biggest divides the survey found.

Financial shocks: Fifty-nine percent of those who feel financially insecure reported experiencing a surprise bill, a sudden drop in income or a loss due to fraud in the past year, compared with 35 percent of financially secure adults.

The most common shock was a large, unexpected expense. Among adults who had one in the past year, 26 percent cited a vehicle expense, 22 percent a housing expense and 14 percent a medical expense.

Emergency savings: This is the clearest dividing line, the survey found. Among adults who feel financially secure, 84 percent have money set aside for unexpected expenses. Among those who feel insecure, 33 percent do.

A rainy day fund gap changes how a surprise bill lands. Thirty-seven percent of financially secure adults said they could cover a $2,000 unexpected expense without a problem. Among adults who feel insecure, only 3 percent said the same.

Credit card debt: 56 percent of respondents who report feeling insecure carry a credit card balance month to month, compared with 29 percent among those who feel secure.

The balances are getting larger. Among financially insecure adults with credit card debt, 34 percent owed more than $10,000 in 2026, up from 25 percent in 2022. Health care is one reason: 54 percent named it as a cause of their card debt, up from 47 percent four years earlier.

Another issue is whether the debt feels manageable. Fifty-seven percent of financially insecure adults said they carry more debt than they can manage, compared with 14 percent of financially secure adults.

Health care costs: Forty-nine percent of adults 30 and older said their monthly health care expenses were higher than a year earlier, up from 42 percent in 2022 and the highest share the survey has recorded.

Those bills can be harder to absorb in retirement. Johnson says average out-of-pocket health care spending for someone on Medicare exceeds $6,300 a year. Stack that on top of rising food, utility and energy prices, he says, and “there’s not much left to live on.”