As Stocks Tumble, So Does Retirement Security
As the Dow Jones Industrial Average continues its downward spiral, there is deep public unease about fully-funded retirements as people's savings are now more tied to stock market performance than at any time in the past two decades.
Just 14 percent in last week's Washington Post-ABC News poll said they feel "very confident" they'll retire with enough income and assets to last for the rest of their lives. More, nearly a quarter (23 percent) lacks any confidence they'll have enough to fund their golden years. Overall, 48 percent said they feel at least somewhat confident, the same figure said they were not so or not at all confident.
Q. How confident are you that you will retire with enough income and assets to last for the rest of your life?
SOURCE: Washington Post-ABC News poll
Financial impact from Wall Street's latest dive is likely to reach further than in previous bear markets. Last October, 58 percent said they or their spouse currently had money invested in the stock market. Compare that with 49 percent in 1998 and 32 percent in February 1987.
In a December Post-ABC News poll, about half (51 percent) said recent declines in the stock market had caused them financial harm, including about a quarter (24 percent) who had been hurt "a great deal." Those figures dwarf the percentage impacted by other recent market dropoffs in 2002 (37 percent) or 1997 (14 percent).
Further, future retirees' savings are more often linked to the market than are those of current retirees. An April 2008 Gallup poll found that more than half (54 percent) of the as-yet-unretired said a 401(K), IRA, or other retirement savings plan would be a major source of income in retirement; that figure stood at 20 percent among those who had already left the working world.
In the new Post-ABC poll, confidence dips lowest among those closest to retirement. Among those age 50-64, 40 percent overall said they feel confident they will retire in financial security, while 59 percent were not confident, including a third (33 percent) who said they had no confidence at all.
And few are convinced the government will make up the difference. Overall, just 39 percent said they feel sure that the Social Security system will be able to pay their full benefits throughout their retirement (only 11 percent were "very confident"), 61 percent said they were not confident in Social Security. Among those who doubt that Social Security will be there, 62 percent are concerned about funding for their retirement.
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