The Consumer Financial Protection Bureau (CFPB) Office of Older Americans has released a state-by-state report on the financial well-being of adults in the United States, as measured by a Bureau-developed metric scale. While the financial well-being of seniors does not fluctuate significantly among the vast majority of states, a few exceptions show both greater and worse financial well-being among seniors compared with the national average.
The metric, called the CFPB Financial Well-Being Scale, is a tool designed to be the first “publicly available, validated and tested tool to measure a consumer’s sense of financial well-being,” according to the Bureau. Determining a financial well-being score between 0 and 100, the scale consists of consists of ten questions in which an individual’s responses yields a score. The score quantifies a person’s underlying level of financial well-being, and is adjusted by age to account for differences in response patterns among older and younger adults.
Older adults, defined as those age 62 and above, have greater-than-average financial well-being in four specific states. An additional three states also deviate from the average, turning in lower-than-average scores of financial well-being among older Americans.
The four states with higher-than-average financial well-being for seniors are New Hampshire (with an average score of 66), North Dakota (65), Kentucky and Utah (both scoring 64). The three states that scored lower than the national average are Michigan (59), Georgia and New Jersey (both 58).
The average financial well-being for older adults in the United States, based on the results of this report, stands at 62. This is 10 points higher than the average figure for all American adults regardless of age, and the states with the highest average financial well-being scores for older adults differ from the states with the highest average scores for adults ages 18 to 61.
On a national scale, older adults have a score that is 13 points higher, on average, than adults in the 18-to-61 age group, according to CFPB. “However, the gap between the average score between both age groups’ adults ranges from 18 to 8 points at the state level,” the Bureau says. The distribution of scores by age group shows score patterns differ by age group in some ways, while breaking the data out by territory can give unique insight into the financial realities of America’s population.
“This analysis of financial well-being scores by state provides an important starting point for understanding how local economic factors can affect people’s financial lives,” the report says. “The survey includes a number of individual level measures that can be supplemented with state-level indicators to develop a model to explain state-level financial well-being.”
Read the full report at the CFPB.