How are retirement plan participants feeling about national and personal issues, and how does that compare with the attitudes they expressed last year at this time? Last year was an eventful one:? the Supreme Court confirming the individual mandate in Obama-care; Hurricane Sandy; the election campaigns; the down-to-the-wire fiscal cliff debate and both the Dow and the S&P 500 nearing record territory as the year ended.?
To begin, 51 percent of Affluent investors surveyed by Spectrem's Millionaire Corner? state that their current financial position is better today than one year ago, up from 46 percent in 2012.? On the other hand, their feelings about the future are essentially unchanged.? Today 58 percent say they will be better off one year from now compared to 56 percent last year.? Additionally, in spite of the good investment returns seen in 2012, fewer than 45 percent say they expect to have sufficient income to live comfortably in retirement.
Concerns about a variety of national issues have heightened over the past year.? Retirement plan participants are expressing more concern over the partisan political environment and the potential for increased taxes.
Retirement plan participants also express high levels of concern about their own economic and personal situations.? However, their financial concerns are a continuing phenomenon, as they show little change from those recorded in 2012.? The potential for a long term economic downturn, maintaining their current financial position, the possibility of inflation and being able to retire when they would like are still of concern to more than two-thirds of participants.?
On the personal side, things appear to have improved somewhat.? Concerns about health, education financing and the economic condition of children and grandchildren have all decreased over the past year.?
What does all this mean for retirement savings?? Almost half still say they are not saving enough to meet their financial goals and 41 percent remain concerned about the amount of debt their household has.? Both of these responses are essentially unchanged from 2012.
Plan participants are, however, paying more attention to investing.? The proportion who say they enjoy investing increased to 42 percent this year from 33 percent in 2012.? At the same time those who say they like to be actively involved in the day-to-day management of their investments increased to 41 percent in 2013 from 36 percent a year ago.?
These attitudes are likely to hold for retirement plan investing as well as for their other accounts.? They are also bringing a somewhat lower tolerance for risk and a greater sense of knowing what they are doing to the management of their investments.? The proportion who describe their investment approach as either very aggressive or aggressive dropped to 24 percent in 2013 from 32 percent a year earlier, while those saying their approach is moderate increased to 55 percent from 49 percent.? In addition, the proportion describing themselves as very knowledgeable about investing almost doubled to 11 percent this year from 6 percent in 2012.?
In summary, the attitudes of retirement plan participants demonstrate greater concern about the country as a whole but a slight improvement in their own situations.? A significant proportion are not setting aside as much as they need to for retirement.? Concerns about household debt and the uncertain outlook for the future indicate that no great increase in deferrals is likely in the immediate future.
Source: http://www.millionairecorner.com/article/retirement-plan-participant-attitudes-2013
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