Most retired investors say they get the implications of the U.S. fiscal cliff. Many would reallocate retirement assets as a result.
Retired investors appear to have a better grasp of the issues surrounding the fiscal cliff, and many plan to reallocate their retirement assets should Congress fail to soften its impact, according to the latest monthly poll from Millionaire Corner.
Most retired investors are pessimistic about the chances of Congress finding a solution to the fiscal cliff, a popular term for the economic crisis that could result if Bush-era tax cuts are allowed to expire at the end of the year when mandated cuts in federal spending are scheduled to take place. In our October survey of 1,350 investors, 54 percent of retired investors answered “no” to the statement, “I am confident that Congress will decide on a solution to the fiscal cliff.”
More than 60 percent of retired investors say they understand the implications of the fiscal cliff (compared to 54 percent of working Americans), but more than half say they would like more information on the topic. Television and newspapers are the primary sources of information for retired investors, though 44 percent say they’ve also learned about the fiscal cliff from Internet sources.
More than one-third of retired investors say they’re likely to change their asset allocation in response to the fiscal cliff, and it looks as though the crisis would drive them toward more conservative investment products. More than 30 percent indicate they would hold more cash if the economy topples off the fiscal cliff, while 15 percent would purchase more gold, a product seen as a safe haven in times of economic crisis. Roughly 11 percent would invest more in bonds, according to our research, while real estate and international investment products would see increased investment from roughly 6 percent of retired investors.
Retired investors appear more concerned about the financial implications of the fiscal cliff than they do about the outcome of the presidential election. While 35 percent would change their asset allocation in response to the fiscal cliff, about 27 percent would reallocate their investment portfolio if Obama wins the elections and 24 percent of retired investors would make adjustments following a win for Romney.