SURVEY: ECONOMY NEVER BETTER, WITH BEST YET TO COME: CONSUMER CONFIDENCE HIGH, WITH 22% SEEING NO FISCAL WOES AHEAD

The economy is good and Americans are lapping it up.

The 1998 Phoenix “Fiscal Fitness” survey reports that more Americans — encouraged by a robust stock market and a rosy economy — feel better about their finances and are opening their wallets.

The annual survey, sponsored by Hartford, Conn.-based Phoenix Home Life Mutual Insurance Co., reports that 23% of respondents plan to make a major purchase — such as a boat or a car — this year, up from 19% last year.

It also found increasing optimism about the future. When asked this year to name their biggest financial concern for the next five years, 22% answered “none,” compared to 17% a year ago.

The national survey was based on telephone interviews with 1,006 respondents ages 30 to 59 between Jan. 12 and Feb. 1. It focused on households in which at least one person earns $40,000 or more annually. The average household income was $87,000.

‘Immediate gratification’

Robert W. Findella, Phoenix’s chairman, president and chief executive, says the survey “reflects a subtle but definite shift toward immediate gratification at the expense of overall financial security.

“I advise Americans to resist the tendency to be artificially buoyed by the rising stock market and healthy economy,” he adds.

Mr. Findella’s message seems to be falling on deaf ears. In fact, 24% of those surveyed say they have reduced retirement savings in the past three years to buy a car, take a vacation or splurge on another treat.

While the survey hints that Americans are becoming cavalier about their retirement savings, an informal survey of financial planners by InvestmentNews didn’t turn up any such signs. If anything, says one, consumers don’t know how to relax and spend their riches.

“Just the other day, I found myself having to convince a client to pay cash for a new car rather than take out a loan for it,” says Joel Ticknor, a fee-only financial planner at Ticknor Financial Associates Inc. in Reston, Va. “My sense is that many people feel uneasy about spending any of the money that they have accumulated.”

no less, but no more

Roy L. Komack, a fee-based planner at Komack Management Services Inc. in Natick, Mass., also hasn’t noticed any financial cockiness among his clients.

“A lot of my clients have money automatically deposited into their investment accounts and I haven’t seen any slowdown in that,” says Mr. Komack, who manages about $20 million in discretionary assets. “Then again,” he adds, “I haven’t seen it increase either.”

The survey, in its eighth year, also found more people believe retirement will be a breeze. A quarter of those surveyed think they’ll have a higher standard of living than they do now, up from 20% in 1996.

The optimism is even more striking given that the percentage of respondents who consider it “very likely” they will inherit money is down to 27%, from 41% in 1994.

This year’s survey shows a downward trend in the percentage of those who are “very concerned” about outliving their savings.

“Life is good,” says Karina Istvan, a consultant specializing in retirement issues at Boston-based Cerulli Associates.

“The market is up, interest rates are low,” she adds. “Maybe people aren’t thinking about retirement as much as they should.”