Market uncertainty, coupled with holiday spending and costs, is taking a toll on investors.
Nationwide’s eighth annual Advisor Authority survey, powered by the Nationwide Retirement Institute, found that most non-retirees say they are “terrified” about their long-term and post-retirement financial futures (51%), with nearly half (43%) checking their retirement account balances more than three times a week in today’s volatile market.
“As the holiday season approaches, it may be best to take a break from obsessively checking retirement balances,” said Eric Henderson, President of Nationwide Annuity, in a statement. “This can create self-induced anxiety which can lead to short-sighted, emotional decisions.”
Anxious investors battling macroeconomic stressors are feeling less confident on their ability to retire. The Nationwide survey found that they number of men and women with near-term retirement plans was severely low: only 2% of men and 1% of women plan to retire within the next five years.
The possibility of a recession in 2023 and current inflation levels are compelling enough for investors to alter their retirement plans. Inflation has led both women (38%) and men (26%) to rethink when they can retire. Women (44%) are more likely than men (28%) to agree that signs of inflation and recession have made them rethink where they can retire.
Despite fears, women better prepared for a recession
Even though women were more likely than men to triple check their retirement accounts weekly (53% vs. 34%), men were slightly more likely to say they are terrified about their long-term financial futures (55% vs. 49%, respectively). In fact, Nationwide found market fears were more likely to be reported by women investors who are not retired. Although men (45%) were marginally more likely to say that they are nervous about their post-retirement financial future than women (38%), women were twice as likely to say their retirement expectations will change significantly if the U.S. economy enters a significant downturn (37% vs. 19%).
However, women investors were found to be more proactive in their retirement decisions and act in adjusting their portfolios to the current market (35% vs. 26% men). Due to this, Nationwide found that women were more likely (41%) to say they feel confident in their financial plan despite market volatility, compared to just 11% of men.
Additionally, non-retiree men were more likely to say they are very nervous about spending down their nest egg in the current market environment than their female counterparts (43% vs. 38%, respectively). Although less than a quarter (24%) of all investors preparing for retirement say they currently have enough guaranteed income in their retirement portfolio to weather a recession, non-retired women were much more likely to say they have enough income in their retirement portfolio to survive a recession (38% vs. 13% of men).
Henderson, Nationwide Annuity president, goes on to suggest nervous investors speak with a financial professional about their market anxieties and build a financial plan to calm fears. “If you want to take proactive steps, have a conversation with your advisor or financial professional and establish a long-term plan – or revisit the plan you already have in place to ensure it remains aligned with your goals in the current environment,” he said.
More Americans banking on millions to retire
The Nationwide survey comes at a time when more Americans are anticipating high costs in their daily life and in retirement, too. A recent Northwestern Mutual study found higher rates of people believe they will need $1.25 million in their accounts to retire comfortably, especially as almost half (43%) said they do not expect to be financially ready for retirement in the future, nor do they believe Social Security will be cover their expenses (45%).
As a result, more Americans are extending their working years from 62.6 to 64, the Northwestern Mutual study finds. One-third expect to live to 100 years old, and another third predict that there is a 50% chance they will outlive their savings.
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