Despite the market volatility seen in 2019, the year ended with U.S. investors feeling more confident about their finances than they had in a while and them worrying less about an impending market crash or recession than any time since 2018, according to the latest Allianz Quarterly Market Perceptions Study from Allianz Life Insurance Company of North America.
During the fourth quarter of 2019, only 43% of respondents to a recent online survey by the firm said they were worried about a coming major recession right around the corner. That was down from 50% in Q3, 48% in Q2, 46% in Q1 and 44% in all of 2018, Allianz said.
Meanwhile, only 39% of respondents said they were worried about a big market crash on the horizon, down from 48% in Q3, 47% in Q2, 46% in Q1 and 42% in 2018, the firm said.
Those numbers had been steadily rising since 2018, before they fell after a relatively calm period in the markets in mid-November 2019, Allianz noted.
However, the latest survey’s findings weren’t all positive as there continued to be lingering concerns among American investors about issues including the rising cost of living and inflation, Allianz pointed out.
While investors may be feeling better about reduced market risks to their retirements, risks from inflation are “top of mind,” Allianz said. Forty-nine percent of respondents said the rising cost of living represented a big risk to their security in retirement, while 34% predicted inflation could prevent them from ever being able to retire, according to Allianz.
Investors with the longest runway toward retirement – millennials — were the most worried about the impact of rising costs, both now and in their future, the firm said. They were more likely to say the rising cost of living was preventing them from saving money for retirement as much as they should (62%, compared with 56% of Gen Xers and 42% of baby boomers). Overall, 51% of respondents said the rising cost of living was stopping them from saving as much for retirement as they should, according to Allianz.
Millennials were also the ones most worried about being able to pay for necessities including housing or medical care in retirement due to the rising cost of living (50%, compared with 46% of Gen Xers and 35% of boomers), Allianz said. Overall, 42% of respondents said they were worried they would not be able to pay for necessities because of the rising cost of living.