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Retirement Confidence for American Workers Has Been Low Since 2022, According to New PGIM RetireWell Confidence Index
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0 KommentarePGIM, 1 the $1.2 trillion global investment management business of Prudential Financial, Inc. (NYSE: PRU), finds that retirement and financial confidence have lingered at “below average” levels since the second quarter of 2022, according to the firm’s new PGIM RetireWell Confidence Index. In addition, the gap between financial confidence and retirement confidence has widened dramatically since the start of 2022, which could indicate that while investors may feel relatively secure in their investments today, they worry greatly about the future.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240205887895/en/
PGIM RetireWell Confidence Index: Using the Prudential financial wellness assessment, the current question used to estimate financial confidence asks respondents, “Overall, how are you feeling about your finances?” while the retirement confidence question asks, “Do you think you’ll have enough savings for the retirement you want?” The PGIM RetireWell Confidence Index is the average of the financial confidence score and the retirement confidence score. (Graphic: Business Wire)
The 2022 dive in retirement confidence coincides with the start of one of the most turbulent years for investors, with the S&P 500 index losing approximately 19.4%—one of the worst years for equities since 2008— in addition to pressures from high inflation and interest rate hikes. Not only was 2022 a tough year for stocks, but bonds also had one of their worst years on record, leaving few safe places for investors to park their money.
“2022 was a relatively traumatic year for investors, where both stocks and bonds experienced double-digit losses. This is incredibly rare, historically,” explains David Blanchett, PGIM DC Solutions portfolio manager and head of retirement research. “If the economy keeps doing relatively well, I wouldn’t be surprised if financial confidence meets or exceeds 2021 levels at some point in 2024, but it will clearly take some time before retirement confidence returns to where it was.”
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PGIM’s quarterly report provides a breakdown of retirement and financial confidence scores across age and household income levels, ranging from 0 (low confidence) to 100 (high confidence). Alarmingly, individuals between 45 and 59 years of age, those approaching retirement, had the lowest average retirement confidence score (37) among age groups. This emphasizes the importance of personalization when it comes to financial advice and retirement solutions, as age alone often doesn’t tell the full story.
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