AXA Equitable uncovered a dismal outlook for the economy and retirement in “Retirement in America: A Survey of Concerns and Expectations,” in which it polled both investors and economists and found a large percentage of both groups bearish on the economy and the markets.
Twenty-four percent of consumers and 12% of economists believe the economy will continue to be volatile with no clear pattern of improvement. Eleven percent of consumers and 16% of economists believe the nation could sink back into a recession.
Only 19% of investors believe equities are necessary to achieve retirement goals. While economists have a different take on stocks, with 69% maintaining they should be an important part of a retirement portfolio, 80% of economists think Americans are uncertain in their ability to successfully invest in them.
As a result, 85% of consumers now believe it's important to invest in financial products that protect principal and provide income that increases with inflation. Another 82% believe healthcare costs will rise, and 73% expect taxes to go up. Forty-two percent plan on delaying retirement by an average of six years, targeting 68 as the year they will call it quits—yet 27% plan to work at least part time in retirement, and 17% of retirees have actually gone back to work, up from 9% in February 2009.
“It’s no mystery that the recent market downturn has shattered consumer confidence in investing in equities,” said Christoph M. “Kip” Condron, chairman and chief executive officer of AXA Equitable. “This apprehension could place significant pressure on Americans’ retirement plans in the near future.
“The fact that historically middle-of-the-pack concerns such as fear of inflation and investments losing value are now top of mind for consumers suggests that they are increasingly aware about their retirement planning,” Condron continued.