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At last, investors are seeing the glass half full – but why do 10 percent with access to a 401(k) not participate?

Post by C.R. Roberts / The News Tribune on June 20, 2013 at 2:35 pm with No Comments »
June 20, 2013 2:35 pm

Maybe it’s finally time to be optimistic.

The Wells Fargo/Gallup Investor and Retirement Optimism Index, released Thursday, rose to plus-43, a surge of 12 points since March and the highest level in two and a half years.

Investors are more optimistic about their ability to maintain incomes over the next 12 months, and optimism is especially high among non-retired investors at plus-45, the highest in two and a half years. Optimism also increased among retired investors, up 25 points since March to plus-32.

Among the data:

• Despite higher optimism, over half of investors, 54 percent, say they have not “personally” benefited much from the stock market’s rise: 33 percent say they’ve benefited “a little” and 21 percent say they haven’t benefited “at all” while 43 percent say they have “personally” benefited “somewhat” or “quite a lot” from the stock market’s increase.
• Real estate is cited by 35 percent of non-retired investor as their top investment choice for investing with a ten-year horizon out of bonds, equities, gold and savings accounts, while 45 percent of retired investors say stocks would be their top choice.
• In the second quarter, 87 percent of investors say they made “no changes” to their stock market allocations, while 10 percent increased stock market investments.
• Two-thirds of investors say they foresee a market correction this year, but 80% say this has not impacted their stock allocations.
• Thirty-eight percent of all investors attest to having a written plan for retirement, which is up significantly from 32 percent a year ago.
• A quarter of all retirees surveyed say their life in retirement is “somewhat worse” or “much worse” than what they expected. The number is higher. Still, 42 percent of retirees who have a written plan say their life is “much better” in retirement than they would have expected.
• Among all investors, 43 percent think saving for retirement should be mandatory for working Americans while 56 percent disagree.
• Sixty percent of investors are either “somewhat worried” to “extremely worried” that their federal taxes will increase over the next 12 months.
• Sixty-six percent of non-retired investors say their employer offers a 401(k) plan and of those who have access to a plan, 90 percent are participating.
• Among non-retired investors, 58 percent say their major source of retirement funding will be a 401(k) plan as compared to 20 percent of currently retired investors. Social Security and pensions are cited as the major sources of funding for retirees; 47 percent of retired investors say the 401(k) plan is not “a source at all” of their retirement funding.

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