NU Online News Service, Sept. 23, 12:40 p.m. – Most U.S. employees still feel good about their retirement plan investments, but some of the youngest employees are scared, according to survey results from KRC Research, Washington.
The researchers who conducted the survey, which was sponsored by the retirement and investment services unit of CIGNA Corp., Philadelphia, interviewed 750 employees in late July and early August.
The researchers found that 75% of the survey participants believe the market will improve by the end of the year, and 66% are either neutral or optimistic about the market.
Thirty-two percent say they may save a higher percentage of their salaries next year or invest in more aggressive assets.
Only 24% describe themselves as pessimistic bears or as “ostriches” who “just don’t want to know” about what’s going on with the market, and only 26% expect to shift to more conservative assets or stop contributing to their 401(k) plans.
But the KRC researchers discovered that the youngest workers were particularly frightened by the stock market slump.
Although workers in their teens and early twenties can wait decades for the market to recover, “Generation Y” workers were more likely than any other workers surveyed to say that the best place for their money to be deposited was in a checking account.
Only 17% of the youngest workers said they would stop contributing to their 401(k) plans if their retirement account balances were lower Dec. 31 than they were Jan. 1. But the percentage of Generation Y workers who were ready to give up on 401(k) plans was higher than for any other age group, the KRC researchers report.