For many investors, buying into and saving for the retirement American dream is no longer a reality, according to a new survey from AARP of 1,628 workers over age 45, conducted last month.
Twenty percent of those age 45 or older have stopped contributing to their 401(k) over the past year, 13% of this group is using these funds or other investment holdings to pay day-to-day expenses, and 34% have delayed retirement.
The current economic situation is depleting what little [retirement savings] individuals have, said Jean Setzfand, director of financial security at AARP. Many people are making quick-fix decisions that put their financial future at risk. Admittedly, times are tough, said Stezfand, who reported that people are using the money for rent, mortgage payments, food, gas and utilities. But saving every little bit helps, she said.
An analyst with the Congressional Budget Office testified before Congress Tuesday that in the past 15 months, 401(k) plan balances have fallen by $2 trillion due to declines in the stock market.