Caution is Watchword for Older Savers’ Strategies

Most Americans (88%) ages 55 and older are growing more cautious regarding their long-term retirement strategy.

The AIG Retirement Re-Set Study found 72% of respondents said the recent economic uncertainty provided a financial wake-up call. Respondents are more likely to seek financial peace of mind as a key goal versus potentially higher but riskier returns.

This year’s survey found that more than four times as many people chose saving enough to have “financial peace of mind” (61%) as a top financial priority compared with accumulating as much wealth as possible (14%). Eight times as many people (32%) plan to look into ways to protect existing assets than those who plan to invest more aggressively to make up for lost time (4%) in response to the recent economic and financial market uncertainty. More than (54%) expressed concern about their personal financial situation, saying they felt less financially secure than they did a year ago.

Respondents listed inflation and the rising cost of health care as their top financial concern (50%), followed by insufficient funding for Social Security and Medicare (40%), higher taxes (20%), the government budget (19%), and global crisis and uncertainties (13%).

“The impact of the most difficult economy in generations has left a lasting impression, with Americans seeing their retirement savings jeopardized by low interest rates and high market volatility,” said Jay Wintrob, president and CEO of AIG Life and Retirement. “While the stock market and economy have somewhat rebounded, the confidence that many Americans once had has diminished. People are now looking for stable, lower-risk strategies that will provide the income and security they need in retirement.”

The AIG study is available here.