Retirees, Nonretirees Differ on Investor Optimism

Although nonretired Americans' optimism surged from -8 in November to +38 this spring, retired Americans' optimism only saw a slight increase, from -5 to +7.

Overall, U.S. investor optimism rose to +31 in March, up from -8 recorded in November 2012, according to the quarterly Wells Fargo/Gallup Investor and Retirement Optimism Index. The divergence between retired Americans (with median age of 70) and non-retired Americans (with median age of 46) comes after six quarters of closely aligned sentiment between the two groups of investors where they seemed to move in tandem, noted Laurie Nordquist, director of Wells Fargo Institutional Retirement and Trust, speaking with PLANSPONSOR.  

More than half (65%) of investors say they have a 401 (k) plan (44% retired and 72% non-retired). Among those with a 401(k)  plan, 30% say the new fee information was something they “paid attention to,” while 70% say  they have paid  “little” to “no attention” to the new information about fees that has been published in the last year. Sixty- two percent say the new fee information has had “no impact” on the way they manage their 401(k); however, 37% say the new information had an impact. 

One positive note, according to Nordquist, was that although half (51%) of investors say now is a “good time” to invest in the financial markets, 85% of investors made no changes to their investments in the stock market.   Ten percent of investors increased their stock market investments during the first quarter 2013 (6% of retired and 12% of non-retired). 

“The lack of action on the part of investors during the first quarter rally shows that people stayed the course and didn’t have a knee-jerk reaction that caused them to change their investment allocations,” she said.