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Today’s Middle-class Consumer May Be Different Than You Think

How do people see themselves now and in the future? How does that help us understand what they want and the best way to connect with them?

The U.S. middle class today is certainly one segment that presents an opportunity for financial services companies to form stronger, authentic connections. However, two big questions in our industry for some time have been whether the middle class really can be served and whether we can serve it well.

To answer them, it’s important to understand what lifestyle continuity means to today’s middle class. The phrase “lifestyle continuity” is powerful, as in “I want to continue to be able to live the way that I live, but I want to be able to do different things inside that.” Current industry thinking about the “right” ways to maintain one’s lifestyle (such as insurance, investing, retirement savings and budgeting) may not align with middle-class needs, attitudes and beliefs. Realistically, how are they likely to prepare for the future?

Recent research defines the middle-

class from the consumer perspective. We found that “middle class” is much more than just a number. It’s not about how much money they make or how much money they have — it’s about how they live.

Being middle class is truly a state of mind. Interestingly, when we overlaid the Pew Research definitions of class compared to how people self-identified, we found that most people think they’re middle class. In fact, about eight in 10 consumers who are technically upper class self-identify as being in the middle class. The same is true for just over one-third of the working class.

Financial worry among middle-class

What’s on Their Mind?

Of those actually in the middle class, 25 percent self-identify as working class. Why? They’re feeling the financial strain (see chart above).

They want to be financially responsible, but they also say they would have a hard time quickly “dialing down” their lifestyle if they had to. (This tells us there’s not much room left in families’ budgets for any additional cuts.)

And how secure do people believe their middle-class lifestyle is? They believe it is more and more difficult to sustain, with 68 percent saying “It is getting harder and harder to be able to live a middle-class lifestyle.” Perhaps even more profound, just 49 percent believe “the American Dream is still alive for the middle class.”

The reality for most, as they look at the options in their lives and careers to move toward a fulfilling future, is they can’t do things without financial worry. They don’t have unrealistic expectations (they’re not envisioning luxurious lifestyles on beaches) — but they want to be able to do things they want to do and change their lives for the better.


The Opportunity Ahead

This all points to an opportunity for the industry to transform its approach and to change how we present ourselves to this market. Instead of talking about the products we offer, we can lead with some of the ways we might be able to help people.

We know there is a gap between consumer perception and industry intention. Part of the solution is making people feel we really want to close that gap, that we want to serve them in a real, individualized and authentic way. This kind of transformation is key to reaching the middle class, and it likely will benefit all segments of the industry.


Scott R. Kallenbach, FLMI, directs LIMRA’s Strategic Research program, which identifies and examines strategic issues that can impact the financial services industry. Scott may be contacted at [email protected]

Scott Kallenbach is associate research director for LIMRA’s Strategic Research. He is responsible for identifying strategic issues that can impact the financial services industry, and for helping member companies develop strategies to meet these challenges. [email protected].

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