Podcast Center
Video Center
Webcasts
Resource Center
Events
March 05, 2015 at 06:54 AM
The Wells Fargo/Gallup Investor and Retirement Optimism Index has surged 21 points in the past three months to its highest recorded level since 2007.
The index hit +69 in February, driven by optimism among both retired and non-retired investors about their personal finances and the economy.
The latest index, released Thursday, was based on a poll of 1,011 investors conducted in late January and early February. The median age of the retiree was 69, and of the non-retiree 47.
Wells Fargo/Gallup said in a statement that the index had a baseline score of 124 when it was established in October 1996. It peaked at 178 in January 2000, at the height of the dot-com boom, and hit a low of negative 64 in February 2009.
Sixty-eight percent of investors said savings from the drop in fuel prices — $108 per month, on average — helped their household budget some or a lot, and a third said it did not make much difference.
Seventy-one percent of non-retirees found the savings helpful, versus 58% of retirees who did.
Seven in 10 investors said they were using this savings to improve their personal balance sheet: 37% to pay down bills and 33% to bolster their savings. Only 25% were using the money for additional purchases: 32% of retired investors versus 22% of non-retired ones.
Financial Markets Beckon
Fifty-eight percent of respondents said now was a good time to invest in the financial markets, up from 52% last July. At several points in 2011 and 2012, the majority said it was not a good time to invest, Wells Fargo/Gallup noted.
More than half of investors said they had seen a noticeable increase in their retirement account values as the stock market has increased this past year, up from 44% two years ago.
Among non-retired investors, 76% were “very confident” or “somewhat confident” they would have enough savings for retirement at the time they choose to retire, up from 62% recorded two years ago.
However, only 40% of investors said they had a “great deal” or “quite a lot” of confidence in the stock market as a place to save and invest for retirement, versus 60% who had “a little” or “none at all.”
The recently launched MyRA federal retirement savings program that allows savers to amass $15,000 in an account primarily invested in U.S. Treasuries has been criticized for the low interest rates it offers by virtue of relying solely on government bonds.
In the survey, investors were asked which approach the federal government should emphasize to help people without access to a retirement account to start saving.
Fifty-eight percent said the preferable approach was to put beginning savers into Treasury bonds, with “virtually no risk of loss,” versus 25% who said that people should be encouraged to invest in stock funds that have the “potential for high returns, but could also lose principal.”
“People may have an improving outlook about investing, but when it comes to investing for retirement, there is still wariness and concern about managing their risk,” Joe Ready, director of Wells Fargo Institutional Retirement and Trust, said in the statement.
