The survey also found that 27% feel the safest place for any money left over after paying their expenses is underneath their mattress. Americans are also cutting back on saving for their children’s education, with 25% saying they have either reduced or stopped saving altogether for college.
Among non-retirees, nearly half (47%) feel their retirement savings habits have been impacted by the current economic environment. Nearly 20% have reduced spending on other things to keep saving for retirement at the same rate, and 30% have either decreased the amount they’ve been saving for retirement or have stopped saving all together. Additionally, more than one-quarter (28%) have not even started saving for retirement at all.
“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, in a press release. “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.”
ESRPs Top List of Investment/Retirement Products
Currently, 61% of U.S. non-retirees own investment/retirement savings products such as employer-sponsored retirement plans (ESRPs), stocks/bonds/mutual funds, pensions or annuities; 39% do not own any of these. Topping the list of investment/retirement savings products are ESRPs (401(k), 403(b), and 457 plans), with nearly half (47%) of non-retirees owning them. Stocks, bonds or mutual funds outside of ESRPs are held by 27% of non-retirees.
College Savings Takes a Hit
The economic environment is also leading to cutbacks in college savings. While 25% are contributing less or have stopped saving entirely, a troubling four-in-10 (44%) have not started saving for their children’s college education at all. A meager 15% have reduced spending on other things to keep saving/paying for their children’s college educations.
Retirement vs. College Savings – Men vs. Women
Nearly half (46%) of non-retirees feel saving for retirement is an equal priority to saving for their children’s college education. While 22% feel saving for college takes priority over retirement, 32% think otherwise, ranking retirement as a higher priority.
“Retirement and college savings often draw from the same bucket of available funds, and people have a hard choice to make,” said Libbe. “Our research shows that lower income households feel paying for their children’s education takes priority over saving for their own retirement. We also found that between the sexes, 39% of men placed saving for their own retirement ahead of saving for their children’s college education, versus 27% of women. Conversely, 53% of women felt that retirement and college savings were equal priorities, versus 37% of men.