Despite recent market turmoil, about 68 percent of Americans have not changed the way they save, invest, or manage their retirement assets in the last three months, according to a recent Bank of America survey of 1000 adults. At first, this appears to be good news. Many retirement savers are finally getting the message that you need to develop a savings plan and stick with it. Then I asked Craig Averill, a personal retirement solutions executive for Bank of America, to clarify the findings. His response:
“Some people may understand the basic axiom of remaining invested in the market for the long term and they may understand the value of dollar cost averaging. But there are a significant portion of people who are being bombarded with a large amount of mixed messaging, which in combination with today’s market is leading to anxiety and indecision. They may feel that any decision that they make today will be wrong. They are kind of in a holding pattern.”
Additionally, 18 percent of the general public has prematurely withdrawn from their retirement accounts due to recent economic conditions. The top reasons were to pay off credit card debt (26 percent), pay down a mortgage (22 percent), and job loss (22 percent).