One in Three Investors Says Retirement Will Be Delayed

Health care costs and low interest rates have reduced investors’ ability to save for retirement or will cause a delay, a Wells Fargo poll found.

Investor optimism tumbled to a level of +24, down from +40 in February, according to the latest Wells Fargo/Gallup Investor and Retirement Optimism Index. The dip was driven by rising investor pessimism about the economy. The optimism of retired respondents plummeted to +17, down from +38 in February, a drop of 21 points and down from +61 a year ago. Non-retired Americans recorded an optimism level of +27 versus +41 in February.

One in three investors (33%) said low interest rates will cause them to delay retirement. Forty-five percent of non-retired Americans and 34% of retirees said they fear outliving their money in retirement because of current low interest rates. Slightly more than a quarter (26%) of non-retired and 19% of the retired said they may invest their money in ways they “might have avoided,” because of low interest rates. Thirty-two percent of investors think today’s low interest rates are likely to lead to a spike in inflation.

Three in four investors are dissatisfied with the total cost of health care. Although most respondents were satisfied with the quality of health care they receive—rating it excellent or good—a majority (80%) said health care is in “a state of crisis” or has “major problems.” Eight in 10 gave high ratings to their insurance coverage.

Rising health insurance costs also cause alarm. In the past year, two in three investors (67%) said their insurance costs increased a lot (23%) or a little (44%). Almost one-third of investors (29%) said rising health care costs have reduced their ability to save for retirement and forced some (12%) to delay retirement.


“A year ago, retired investors were three times as optimistic as working Americans and now retirees are less optimistic, which may be attributed to how challenging it is to have any kind of growth in savings,” said Karen Wimbish, director of retail retirement at Wells Fargo. “Our questions on interest rates show the impact low rates are having—they are challenging for retirement nest eggs, particularly when core inflation rate growth is about 3% a year and CD rates are yielding less than 1%. Some people may feel like they’re pushing mud up hill.”

The May poll found significant differences between how today’s retired Americans are funding their retirements and how non-retirees expect to do so. Today’s retirees are more likely to depend on employer-sponsored pensions and Social Security, while future retirees expect to rely on their own savings. The survey found that:

  • One in five (20%) non-retirees said Social Security will be a major funding source in retirement, down from 30% in May 2011, and compared with 47% of retirees;
  • Two in three (64%) of the non-retired said their 401(k) will be a major source of retirement funding for them—down from 70% in February, and compared with 33% of the retired;
  • Thirty-six percent of the non-retired expect pensions to be a major funding source for retirement—up from 32% in February, and compared with 50% of retirees; and
  • Thirty-one percent of the non-retired call stock investments a “major source” for funding their retirement—down from 33% in February, and compared with 27% of the retired.


Having a written financial plan makes a difference in how people perceive their retirement goals. Among those with such a plan, 82% of non-retired and 92% of retired feel plans having specific financial goals or targets makes them confident they can achieve their future goals.

Those with a written financial plan are in the minority. Just 28% of the non-retired respondents and four in 10 (42%) of the retired said they have a written plan for retirement. The survey found one marked difference among the sexes: About half of retired women (51%) have written plans versus 32% of retired men.

When it comes to investing in equity markets, survey respondents are divided. Nearly half (48%) said it is a good time to invest, a dip from 52% in February and 53% a year ago.

But there is less optimism when it comes to the market’s impact on retirement savings.

More than half of investors (57%) said they feel they have little or no control over their ability to build and maintain retirement savings in the current environment.

Interviews were conducted from May 4 to May 12 for the Wells Fargo-Gallup Investor and Retirement Optimism Index with 1,018 randomly selected Americans nationwide who have more than $10,000 in savings and investments. A quarter of the respondents are retirees; the remaining respondents are non-retired.