Market Cynicism Has Increased Retirement Anxiety

Amid heighted pessimism about financial markets and global political tensions, Americans are increasingly worried about the effects to their retirement savings, according to research from the Allianz Life Insurance Company of North America.

The “2022 Q1 Quarterly Market Perceptions Study” found that 47% of respondents said the economy will improve in 2022, down from 54% in 2021’s first quarter and 66% in 2022’s fourth quarter, while 79% are concerned that current world tensions will cause a recession and 43% are “too nervous” to invest in the market, up from 34% in Q4 2021.

“People don’t like uncertainty when it comes to finances and that is exactly what we have experienced in the markets thus far in 2022,” Kelly LaVigne, vice president of consumer insights, at Allianz Life, said in a statement. “Unfortunately, we’re seeing that the vast majority of Americans expect volatility to stick around this year and it is adding yet another layer of risk to manage within their financial portfolios.”

Allianz data show that Americans’ worries about markets have become a source of retirement concern. The research found that 40% of respondents said market volatility has caused anxiety for them about retirement, an increase from 37% in Q4 2021. 

In another testament to reigning pessimism, only 24% of respondents said they feel comfortable with the current conditions to invest now, down from 29% last quarter, according to Allianz.    

“Anxiety about the risks of volatility on retirement savings is higher than it has been in a year,” the study states.

With recent market swings, Americans are seeking to protect their retirement savings from market risks, data show.

Allianz found that 65% of respondents said that because of market volatility experienced recently, they regret not protecting more of their retirement savings from market loss, while 59% want to add more protection to their investment portfolio after a market correction and 66% said they wish they could have locked in their gains during recent market highs.

Additional findings on Americans’ outlook for the economy are that 60% worry a major recession is imminent; 56% are concerned there will be another big market crash, up from 50% in Q4 2021 and more than any time in the last year; and 81% of respondents expect volatility to continue this year.

Allianz Life conducted the online survey in March 2022 with a nationally representative sample of 1,002 respondents age 18 and older.