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Poll shows workers uncertain about investments, retirement savings

by Jim Sloan

Workers in the U.S. are increasingly glum about their investments and retirement savings accounts as they watch energy prices, unemployment and federal budget deficits continue their uphill march.

A recent Walls Fargo/Gallup poll found that its "Investor and Retirement Optimism" index fell by 9 points to 33 during the three-month period ending in April. The index was 155 in 2000 and was sitting at 95 in 2007 when the financial crisis began decimating many Americans' investments and retirement savings accounts.

Struggling to save and pay bills

The survey found that Americans who are still compiling their retirement savings accounts are more pessimistic than those who are already in retirement. The index among workers was 24, down 31 percent from 35 in February, and the index among retirees in May was 61--the same level it was when measured in February.

Wells Fargo officials told Reuters News Service that those gloomy feelings are a result of workers who are struggling to pay monthly bills while they look for the highest cd rates or try to sock away retirement money into the best savings accounts.

The interest rates on most low-risk savings instruments, such as a CD or a money market account, remain at historic lows. Interest rates on the best online savings accounts have also been declining recently.

Most survey respondents--79 percent--cited the price of energy as the top factor for their ambivalence about investments. Seventy-five percent cited the federal deficit and 67 percent blamed the unemployment rate for putting them in an investment funk.

Retirees remain upbeat

According to the Associated Press, the Wells Fargo/Gallup Index is based on telephone interviews conducted quarterly. Respondents included 1,099 people 18 and older who have investments. Two-thirds of those surveyed were working and their average age was 45. The remaining respondents were retirees with an average age of 69.

Wells Fargo officials told AP that retirees remain fairly optimistic because their retirements are based on pensions and Social Security, neither of which is currently threatened. Half of retirees rely on Social Security as a major source of income, and 46 percent said they are getting pension income.

Most workers, on the other hand, said they would be relying more on their 401(k) accounts during retirement. Only 30 percent said they expect Social Security to be a major source of income in retirement, and only a third are expecting a pension to be a major funding source.

As workers continue building a 401(k) retirement savings account, they face an uncertain job market, rising prices and stagnant wages, Wells Fargo noted. Health care costs are also a concern as workers keep a wary eye on savings account rates and money market rates.

About a third of the workers interviewed for the survey said they are planning to increase their savings while half said they would continue saving at the same level.

The survey also reported the percentage of workers who felt "now" is a good time to make investments in financial markets fell from 62 percent in February to 53 percent in May--a period in which the S&P Index of large U.S. companies rose more than 8 percent.



Disclaimer:This content is not provided or commissioned by American Express. Opinions expressed here are author's alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.

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