In the wake of economic and stock market volatility, many 401(k) investors are questioning the wisdom of 401(k), 403(b) and 457 plans, a survey by Allianz Life Insurance Company finds.
A perhaps even more startling finding: 27% of non-retiree plan participants said saving money under their mattress is the safest place to put it.
As for saving for their children’s college education, 25% have either reduced or stopped saving for their children’s college education and 44% haven’t started saving for their children’s higher education at all.
Nearly a third, 30%, have either stopped saving for retirement or cut back on their contributions, and a full 28% haven’t even begun saving for retirement in the first place.
Forty-seven percent of those not yet retired say the economy has had an impact on their retirement savings habits. Among those still saving, 20% said they have had to cut back on other areas in order to continue to afford to save.
“Given the gut-wrenching events and market volatility of late summer, consumers are questioning traditional retirement savings vehicles and changing their savings habits,” said Katie Libbe, vice president of consumer insights at Allianz Life. “Recent events have only deepened the uncertainty many have felt about retirement since the market meltdown of 2008 when the average 401(k) account balance lost nearly 30% of its value.
“The toll taken by recent economic volatility has yet to be fully calculated, but one thing is certain: It has directly impacted how people are approaching saving for retirement and college,” Libbe continued.
This article originally appeared in Money Management Executive, a Source Media publication.
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