Filed under: Investing
The Great Recession was the gift that keeps on taking away. According to a new study from Wells Fargo and Gallup, investors, whether retired or still working, are in a bad spot generally. A phone survey of investors with $10,000 or more in assets reflected a seven-year relative high in optimism about the economy in general, that percentage was still well below the popular sentiments before 2008. Furthermore, few of the investors felt much optimism in their person financial circumstances.
And 58 percent said their finances were doing no better or even worse than five years ago. Forty-six percent said that they were still feeling the effects of the recession either a lot or fair amount. Only 22 percent didn’t feel any effects from the economic crash.
“I’m not recovered or I’m where I was, and the future does not look rosy,” Karen Wimbish, Wells Fargo director of retail retirement, told DailyFinance. “I think a fair amount of boomers were thinking, ‘My retirement savings was my home equity,’ and that’s not going to work out for a lot of people.”
Investors have largely felt that they’ve hit a dollar-green-colored ceiling. Fifty-six percent can’t see a time when “their income will be significantly higher than it is today.” People still working who have more than $100,000 put away were the most pessimistic, with 61 percent feeling that they’ve maxed out, vs. 51 percent of investors with less than $100,000 in assets.
The Great Stagnation
Few have found more money to grow their savings and investments, either. Only 37 percent saved and invested more than they did before the recession. Another 34 percent were saving about the same, while 29 percent save less. The situation has been stagnant for the last two years, meaning that no matter what seems to be happening in a macroeconomic picture, improvements aren’t working their way down even to the people who have saved.
Just over half of the respondents think that inflation is causing the problem, even though it remains at relatively low levels. Another 37 percent blames wage stagnation, while 9 percent say it’s the combination of inflation and lack of wage growth.
When it comes to attitudes toward equity markets, 60 percent say it is “wise” to be cautious about “possible market losses.” And yet, 68 percent have stocks in their long-term savings plans. “We look at that as where else are you going to put your money?” Wimbish said.
The picture is grim. “We did a different survey of middle class America the year before last, and the headline was 80 is the new 65,” Wimbish said. “The answer for a lot of people is, ‘I guess I’ll keep on working.’ I say look around at your workplace. How many 70-year-olds are still working? Retirement is going to look very different for the coming generation than for today’s retirees.”
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Source: Investing
