Seven in 10 Americans say the impact of the COVID-19 pandemic is making them rethink how to protect their savings from the ravages of the stock market. Further, 54% are worried that the market still hasn’t bottomed out, according to a Market Perceptions Study by Allianz Life Insurance Co. done in May. More than half stated that COVID-19 was increasingly affecting their nest egg.
The online survey of 1,006 people over 18 also found that 65% (up from 48% during the same time last year) are worried about a major recession. That said, 69% believe they can rebuild their savings even if the market continues to drop.
“There was definitely angst about market swings before COVID-19, but the economic impacts of the pandemic are having a devastating effect on retirement savings,” according to Kelly LaVigne, vice president of Consumer Insights, Allianz Life, adding that almost half of those surveyed have reduced or stopped saving for retirement. “The good news is people seem to be taking a long-term view and looking ahead to what’s next.”
Despite overall survey findings, 69% of respondents said they still felt optimistic that there is time to rebuild their nest egg if the market stabilizes. Further, 42% — the highest level over four quarters — said now was a good time to invest in the market, although 52% said it was a good time to not take any action, while 44% said they won’t be adding to investments at this point.
Although the majority — 72% — are looking at how to protect their savings and are interested in protection-type products, a third believed it was important to put money into financial products that offer growth and protection. Forty-five percent said they were “willing to give up some potential gains for a financial product that protects a portion of their retirement savings.” This is up from 38% over the same time period last year.
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