Record health costs are impacting financial security and not just for lower earners

Nearly half of American adults age 30 and older feel financially insecure heading into 2026, with soaring health care costs and unmanageable credit card debt driving much of the strain, according to new research released Thursday.

The AARP Financial Security Trends Survey, now in its seventh wave, found that 42% of adults 30-plus rated their financial situation as only fair or poor in January 2026, up from 39% when the survey launched in January 2022. The share feeling secure has slipped from 61% to 58% over the same period.

"Rising costs are eating into household incomes across the board, and older Americans are feeling that gap acutely," said Richard Johnson, Vice President of Financial Security at the AARP Public Policy Institute. "When nearly seven in ten say prices are rising faster than their income, that is not a story about individual financial decisions, it is a story about affordability that is touching households at every income level."

The numbers are notable not just for their overall direction but for where the deterioration is concentrated.

While lower-income Americans remain the most financially vulnerable, the sharpest erosion in confidence since 2022 has occurred among middle- and higher-income households. Among adults earning $75,000 to $99,000 annually, the share feeling insecure jumped 16 percentage points — from 20% to 36%. Among those earning $100,000 or more, insecurity rose from 14% to 21%.

Record health care costs

One standout finding this year is that a record 49% of adults say their monthly health care expenses are higher than they were 12 months ago, up from 42% in January 2022. Among those who feel financially insecure and carry credit card debt, more than half now cite health care costs as a driver of that debt, up from 47% in 2022.

The broader inflation picture has been mixed. Average weekly earnings for private-sector workers rose 17% between January 2022 and January 2026, roughly keeping pace with a 16% increase in the Consumer Price Index over the same period.

However, 72% of adults 30-plus remain worried about prices outrunning their income, and among the 22% who say their financial situation has worsened over the past year, rising expenses are the most commonly cited reason, named by 63% of that group.

"With prices rising for everyday essentials like groceries, housing, utilities and health care, current and future retirees are counting on Social Security now more than ever," said Nancy LeaMond, Executive Vice President and Chief Advocacy & Engagement Officer at AARP. "The bottom line is that Social Security is the critical foundation of retirement security that Americans have earned through a lifetime of hard work, paying in with every paycheck. It must be strengthened and protected."

Savings and debt

The survey's regression analysis identifies three variables most strongly associated with whether someone feels financially secure: the presence of emergency savings, retirement savings, and the absence of unmanageable credit card debt. Income matters, the report notes, but it doesn't tell the whole story.

The emergency savings gap is particularly stark. Among adults with incomes between $40,000 and $74,000, 84% of those who feel secure have emergency savings, compared to just 36% of those who feel insecure. Confidence in handling a $2,000 surprise expense reflects the same divide: 37% of those who feel secure say they could cover it without difficulty, versus just 3% of those who feel insecure.

On debt, 56% of financially insecure adults carry revolving credit card balances, nearly double the 29% rate among those who feel secure. Credit card balances are also getting larger among the insecure: 34% of financially insecure adults with credit card debt now owe more than $10,000, up from 25% in 2022. Overall, 57% of the financially insecure say they have more debt than they can manage, compared with 14% of those who feel secure.

Financially secure

The survey draws a notable contrast between how the two groups have changed since 2022. Adults who feel financially secure today are less worried about retirement and rising prices than those who felt secure four years ago, are more likely to have over $100,000 in retirement savings and carry less debt overall.

Among those who say their finances have improved compared with a year ago (27% of respondents) a record 33% attribute that improvement to investment gains, likely reflecting 2025's strong equity market performance.

The financially insecure tell a different story. Their worries have not eased at all: close to nine in 10 remain anxious about rising prices and retirement security, rates essentially unchanged from 2022. Their debt loads haven't shrunk either.

Workplace plans a key differentiator

Access to employer-sponsored retirement plans emerges as a meaningful factor in long-term financial resilience.

Among non-retired adults, 52% of those who have ever worked for an employer offering a retirement savings plan have accumulated at least $100,000 in retirement savings. That figure drops to 16% among those who have never had access to such a plan. And 66% of those who feel financially secure report having had access to a workplace plan at some point, compared with 46% of those who feel insecure.

Younger, higher-income adults appear newly exposed to financial pressure. Among adults earning $75,000 to $99,000, those ages 30 to 49 saw the steepest increase in insecurity since 2022 — up 26 percentage points, from 27% to 53%.

Among adults 65 and older, the biggest increase came in the $40,000 to $74,000 income band, where insecurity rose 12 points.