Two-thirds of Mass Affluent investors are worried about having enough money set aside for retirement, according to a new Spectrem Group study. While this is down slightly from 2010 (when the economy had not yet exhibited as signs of recovery), it is still enough to displace Maintaining my Current Financial Position as the top personal concern for investors with a net worth between $100,000 and $1 million (not including primary residence).
More than half of these investors are also concerned about being able to retire when they want to.
Not surprisingly, these issues are of most concern to younger investors ages 54 and under. Nearly three-fourths (71 percent) worry about having enough money set aside for retirement, while two-thirds fear they will not be able to retire as planned. Sixty-five percent of baby boomers ages 54-64 share this concern, while two-thirds ponder whether they will be able to retire as scheduled. Mass Affluent investors at the lowest wealth level ($100K-$499K) are also most likely to have these attitudes.
Concerns about retirement are no doubt heightened by concerns about Social Security, and whether it will still be available once younger investors reach retirement. A recent Gallop Poll found that two out of three Americans believe Social Security costs are already creating a crisis for the federal government (34 percent) or will do so within 10 years (33 percent). This concern ties in with the increasingly urgent debate on how to combat the growing federal deficit. Social Security, along with Medicare and Medicaid comprise a large portion of the federal budget. It will be difficult to significantly reduce the deficit without addressing these costs.
In what is perhaps an indication of the priority these investors place on saving for retirement, only 7 percent said that they have taken early withdrawals from their retirement account because of the current economic climate. Of these, though, 11 percent of investors ages 54-64 have done this, most likely out of necessity.