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Retiree Optimism on the Rise, Investors More Cautious


Retiree optimism is up significantly in the fourth quarter, but investors remain more circumspect.


Retirees are closing out the year on an optimistic note, according to a new survey.

The Wells Fargo/Gallup Investor and Retirement Optimism Index found optimism surged among retirees in the fourth quarter of the year. Retiree optimism was up 19 points to +54 on the Index’s scale.

Non-retired investors, meanwhile, got a bit less optimistic, dipping from +50 last quarter to +46 in the current quarter. That meant overall optimism on the index was at +48, slightly higher than last quarter.

“While moving in the right direction, investor optimism and outlook regarding the economy are recovering at a snail’s pace rather than roaring back,” said Joe Ready, director of institutional retirement and trust at Wells Fargo. “Another sentiment we see in this poll is a mixture of views on the availability of funds for retirement. A majority say they could save more on a monthly basis, but, at the same time, a majority also thinks the top reason Americans struggle to save for retirement is the pressure of day-to-day bills. There are really 2 realities people are dealing with as our country moves forward.”

Among the non-retired investors, nearly 7 in 10 (69%) have access to an employee sponsored 401(k), and virtually all of those people—96%—are investing in their plans. Of those, 86% said their employer offers some level of matching funds.

The survey also asked workers for the first time if they prefer a 401(k) plan, which offers individual control but uncertain returns, or a guaranteed-income plan, which offers defined returns that are dependent on years served and pre-retirement salary. The survey found a slight majority—52%—prefer the 401(k), compared to 46% who prefer a pension.

“I find this response to be one of the most enlightening of the study,” said Ready. “In the world we live in today, the balance has shifted in terms of people viewing the 401(k) plan as the preferred vehicle for saving over a pension. Yes, it requires more work from the participant, but people like the flexibility and the autonomy the workplace plan provides.”

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