Stock market volatility is having a big impact on how people are saving up for retirement. People are now putting more money into cash and are being far more cautious when investing in stocks. Learn more about the actions that people are taking due to their retirement savings due to stock market volatility.
About half of Americans believe that the US economy is beginning to slow down as we enter 2020. One-third of people believe that a recession will occur by the end of the year. A similar amount of people think that the stock market will drop in the near future.
All of this volatility in the market is forcing people to rethink their strategy of saving up for retirement. More people are now willing to delay their retirement to earn more money for their retirement, and some are saying that they may make changes to their lifestyle to put more money aside. The volatility is also causing people to keep a closer eye on their retirement portfolios.
The sentiments described above are from a poll done by Kiplinger and Personal Capital, a wealth management company. They surveyed 850 people aged 40 and above that have actively set aside money for retirement. An equal amount of men and women were interviewed.
Taking a look at the numbers from the poll, the median amount of money saved for retirement among those surveyed was about $500,000. The median amount of savings people said they needed for retirement was about $1.2 million. Despite the gap, most of the people surveyed said that they felt confident about reaching their retirement goals.
An interesting development of the stock market volatility is that more and more people are now shifting their retirement savings into cash. The retirement savings survey found that people planning for retirement now hold more savings in cash than in bonds. People are also more likely to go for safer, less risky investments such as savings accounts, CDs, and money market accounts.
More than half of respondents in the retirement savings survey said that they are somewhat or extremely worried about the stock market. Diversifying their retirement savings was the most popular action taken in response to market volatility. About half of the people also said that they would consider divesting the number of stocks they hold for retirement. Almost 70% said that they would consider delaying retirement by one to four years to allow their investments to recoup from a market decline.
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