A new survey by financial software maker Intuit Inc. found that the number of households whose members planned to postpone retirement increased by 21% from last year to 2.3 million. Of those forced to put off retirement, the percentage expecting at least an eight-year delay doubled since last year to 22%.
While nine out of 10 respondents said the value of their retirement portfolios has shrunk in the bear market, 34% say they still plan to increase their retirement fund investments in 401(k)s and IRAs, according to the survey.
Investors have also discovered the risk and return benefits of asset allocation: 70% have rebalanced their portfolios in the last year and 68% report they are not pulling out of stocks or bonds despite the down market. Despite this long-term commitment, 73% of respondents feel it will take at least three years for their portfolios to reach the levels they saw at the peak of the bull market.
In the course of rebalancing, 49% of those surveyed say they are changing their investment/retirement strategies. Of those making changes, bulls and bears are almost equally weighted, with 23% increasing their cash position and 24% reducing their cash holdings. In addition, the survey found that investors are slightly more willing to hold stocks in tax-advantaged retirement accounts
A Loss of Confidence
The raft of recent corporate accounting scandals has also apparently impacted some investors’ confidence in advice from financial experts, the survey found. When making investment decisions, 58% of investors consult newspapers, magazines or newsletters, while only 30% consult their stockbrokers. Additionally, 70% of investors say their confidence in financial experts has declined “a lot” or “somewhat.”
Other survey findings include that:
- The elderly have apparently been hit the hardest by the down economy, at least when it comes to stopping work. Some 21% of those delaying retirement are between the ages of 55 and 64, with 18% being 65 or older. By comparison, only 8% of those ages 35-44 and 15% of those 45-54 years of age expect to have to put off retirement.
- Women are less likely than men to make changes to their investing and retirement strategies.
The survey was conducted by International Communications Research from January 24 to 27, 2003 among 500 Americans with an annual household income of $75,000 or more and who actively manage their investments.