Overview

The Financial Security view of the Benchmarking application evaluates long-term financial preparedness and the ability to sustain one’s lifestyle into the future, especially during retirement or broader economic changes. It highlights wealth accumulation, investment behaviors, and retirement readiness.

Indicators in this view assess whether households have built sufficient assets and are making financial decisions that support lasting economic well-being. As with other views in the Financial Health Framework, insights are grouped into Critical, Supportive, and Contextual Indicators based on their influence on long-term security.

Critical Indicators

These indicators are most influential in assessing long-term financial security. They focus on wealth, home equity, retirement savings, and investment participation.

• Median Net Worth: Higher net worth indicates greater long-term financial security and ability to maintain lifestyle in retirement.
• Wealth Score: A comprehensive measure of a household’s financial resources. A higher wealth score suggests greater financial security and ability to weather long-term economic changes.
• Median Home Equity: Higher home equity provides a financial cushion and potential source of funds in retirement.
• Retirement Assets: Larger retirement asset balances increase the likelihood of maintaining lifestyle in retirement.
• Propensity to Have Securities: Measures likelihood of owning stocks, bonds, or mutual funds, indicating investment engagement.
• Propensity to Have an IRA: Reflects preparedness for retirement through tax-advantaged savings.

Supportive Indicators

These indicators provide additional detail around wealth-building activities and investment behaviors that support long-term financial stability.

• Median Home Value: Higher home values can increase overall net worth and provide more options for future financial decisions.
• Securities Value Estimate: The value of investment holdings. Higher securities values contribute to overall wealth and long-term financial security.
• Propensity to Have 529 Savings Plan: Likelihood of having a 529 savings plan for education expenses, indicating long-term financial planning.
• Propensity to Have Mutual Funds: Likelihood of investing in mutual funds, suggesting diversified investment strategies for financial stability.
• Propensity to Have Any Investments: Likelihood of holding investment assets, reflecting financial growth strategies and wealth accumulation.

Contextual Indicators

These provide broader signals of financial planning activity and wealth-building trends that help frame the household’s financial security profile.

Propensity to Have Met with a Financial Planner: Engagement with a financial planner is associated with better long-term financial outcomes and security.

12-Month Home Value Increase: Tracks home appreciation as a key wealth-building indicator.

Propensity to Have Acquired or Added to Any Investments in Past 12 Months: Regular investment activities can indicate ongoing efforts to build and maintain long-term financial security.