‘Terrified’: Nearly half of investors check retirement balance 3 times a week

Devoid of context, “turbulence,” “volatility,” and “chaos” are meaningless terms, particularly when they relate to the stock market. For those few left who could recall the Crash of ‘29, or even the greater (and aging) number present for Black Monday (Oct. 19, 1987), the recent ups and downs of the market would barely merit a raised eyebrow.

However, a recent survey of 500 financial advisors and 500 adults with at least $10,000 in assets suggests memories are short when money is involved. The survey, which comes to us from Nationwide, reveals an unusually high level of market anxiety as a result of the recent combination of inflation and a market downturn.

Those close to, or at least pondering, retirement are the ones really pushing the panic button, the survey reports. If those folks happen to be covered by an employer-sponsored benefits plan, now is the time for sponsors and their advisors to sally into the fray and allay the growing fears of their members.

First, let’s take a look at what the survey found. Highlights include:

• Investors are “terrified”: 51% of investors who are not retired say they are “terrified” about their long-term and post-retirement financial futures.
• Watching their money: 43% of investors are checking their retirement account balances three or more times a week.
• Retirement put on hold: Just 2% of men and 1% of women plan to retire in the next five years.
• Advisors see their clients’ stress: 34% of financial professionals say their pre- and recently retired clients are canceling or delaying their retirement.

Men vs. women: Contrasting levels of confidence

The study also identified differences in the way men and women are responding to the market’s meanderings.

• 41% of women who are not retired feel confident in their financial plan despite market volatility, compared to just 11% of men who are not retired.
• 45% of men are generally more nervous than women (38%) about their post-retirement future.
• 19% of men and 37% of women believe entering a major downturn in the economy will significantly change their expectations for retirement.
• 38% of women and 26% of men are rethinking when they can retire because of inflation.
• 53% of women and 34% of men are checking their retirement account balances more than three times a week.
• 35% of women and 26% of men are likely to take steps to adjust their retirement portfolios in the current market climate.

Related: Empower (inflation-weary) employees as they struggle to save for retirement

That the current inflation rate is far below historic highs does not seem to be a mollifying factor for individual investors. Combined with the market’s fluctuations–again, nothing serious by even recent (2008-2010 recession) gyrations–those contemplating retirement are feeling constantly in a state of uncertainty these days.

But with history as our guide, experts are encouraging investors and especially plan members to relax. “It may be best to take a break from obsessively checking retirement balances,” said Eric Henderson, President of Nationwide Annuity. “This can create self-induced anxiety which can lead to short-sighted, emotional decisions. It’s a habit that is unlikely to serve a constructive purpose.

If an investor wants to take proactive steps, they should have a conversation with an advisor or financial professional and establish a long-term plan – or revisit the plan they already have in place to ensure it remains aligned with their goals in the current environment, Henderson says.

Good advice, agrees Michelle Wood, an Edward Jones financial advisor in San Antonio. There are things investors can do to avoid getting stressed out. For example, if they don’t need the money right away, there’s no real need to constantly check their investment statements. Also, they can give themselves time to make investment decisions – even a short delay can help them reconsider moves that may be driven by emotions, Wood says.

Over the longer term, investors should try to build an emergency fund to help keep them from “dipping into investments when their price is down,” she says. And advise them to work with a financial professional, who can help create a strategy to follow in all types of investment environments. Instead of worrying about things they can’t control, they should focus on those that they can – “such as making those investment choices appropriate for your needs and capable of helping you meet your goals,” says Wood.

Juli McNeely, investment advisor and owner, Financial Clarity by Design, Spencer, WI, said a good first step might be to disconnect from the news. “If you listen to mainstream media, they will keep you anxious and worried,” she said. “And people will believe what they hear.”

Among her firm’s services, Financial Clarity provides financial consulting services to employer- sponsored plans. She encourages plan members to develop a long-term investment strategy with the guidance of a trusted financial advisor. Then, stick to the plan.

“It really does help to have a financial plan. Many people do not have a plan. They don’t look at their financial life in a holistic way,” says McNeely. A trusted advisor can help you create a plan that lets you sleep at night, she says.

With her benefits plan clients, McNeely’s team meets at least annually with members to review their investment plans and make sure they are comfortable with where they’re at.

“With these recent fluctuations, our clients have not been calling in a panic because we are in touch with them through meetings and webinars. We keep them informed and they know they can contact us if they have questions or concerns.”

Nationwide’s Henderson noted that the survey results from the financial advisors interviewed suggested that their clients may be painting a rosy picture of their current state of mind, when in fact their fears are growing daily.

“According to our data, some advisors may be underestimating the level of anxiety their clients are living through,” Henderson said. “Advisors and financial professionals should seize the opportunity to engage with their clients to reinforce the importance of sticking to their long-term plan. Another way to address client anxiety about forces beyond their control is to help them understand the value of protection solutions, like annuities, that can guarantee income in retirement and guard against market volatility.”