Optimism About Retirement Plans Alive, But More Tepid
There’s still a sense of optimism among investors concerning retirement plans and savings, but it’s not as robust as it was a year ago, says a report by Wells Fargo and Gallup. Stock market volatility
is to blame, they say.
In fact, the report says that optimism about the stock market’s prospects for this year is in short supply. Just under half of 1,012 investors surveyed between Jan. 29 and Feb. 7 were optimistic about that in the fourth quarter of 2015, and now barely one-third are.
And the investors’ confidence in the stock market as a vehicle for retirement saving and investment is comparable: 43% had been confident, and now 36% are.
But hope is still alive among the investors that this won’t last for long: Just over half consider the market volatility temporary. And most are holding firm — 81% said they rode the volatility out and did not change their investments because of it. Still, despite the predominant solidity about investment, almost 60% expressed interest in financial advice on handling volatility in 401(k)s.
Confidence in Retirement Savings
With a heightened sensitivity to market volatility, it should come as no surprise that confidence in the sufficiency of retirement savings has taken a hit. Wells Fargo reports that while almost half of retired investors were very confident that their savings would be enough for their retirement, 39% are now. And strong confidence is even lower among investors who have yet to retire: 28% of them were very confident in the fourth quarter of 2015 that their retirement savings will be sufficient when they retire, and 23% are now.
Future retirees regard account balance and how money is allocated and invested as equally important to saving enough to cover expenses during retirement. And they believe in the importance of saving, at least: a strong majority — about 70% — somewhat or strongly agree that they have saved consistently for retirement since entering the workforce.