A research firm is projecting a decline in investable assets for retirement income due to the prolonged negative impact of low interest rates.
Research firm Hearts & Wallets, Hingham, Mass., disclosed this finding in Portrait of U.S. Household Wealth: Market Sizing, Segmentation and Product Ownership by Age, Assets, Life Stage and Behavioral Segment. The report leverages multiple government data sources and layers on new, proprietary quantitative 2012 data from more than 5,400 U.S. households, plus qualitative research to assess the state of American investor finances.
Hearts & Wallets projects a retirement income market in 2020 of between 14 to 24 percent of all U.S. household investable assets, lower than the 20 to 30 percent projections the research firm made at this time last year.
“Retirees are working longer and reducing income drawn from assets because of very low interest rates resulting from ongoing government policy and uncertain equity markets,” says Chris Brown, principal of Hearts & Wallets. “These factors impact the retirement income market.
“We’ve revised our 2020 projections downward as a result,” he adds. “The biggest concern is not the size of the market, but the unfortunate impact on millions of retiree households. Sadly, those getting hit worst are the middle and lower middle wealth groups.”