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The Nest Egg Recovery Timeline: Edward Jones Survey Reveals Nearly 40% of Americans Say It Will Take More Than Three Years to Recoup Losses
| Source: Edward Jones
ST. LOUIS, MO--(Marketwire - May 5, 2009) - Nearly four out of 10 Americans (or 39%) say
they expect it will take at least three years to recover the value of their
retirement savings that were lost in the financial downturn, according to
the findings of a recent survey by financial services firm Edward Jones.
While 20% said the recovery would take fewer than three years, nearly
one-quarter of respondents (24%) predict that a full recovery of losses
would require at least six years. Only 4% expect their savings to fully
recover by 2010.
The study of 1,000 respondents, which was conducted by Opinion Research
Corporation on behalf of Edward Jones, reveals the majority of middle-aged
Americans anticipate it will take longer than three years (54%) to recover
a loss in retirement savings, compared with those in the same age group,
who believe it will take fewer than three years (20%). Included in the
group of Americans not saving for retirement were younger Americans (37%)
and senior citizens (25%).
"No one can predict when the market will recover," said Alan Skrainka,
chief market strategist at Edward Jones. "If you look at similar declines
in the stock market, the average recovery is two-thirds in two years, and
full recovery in five years. History is not always a guide, and this
recovery could take longer, but if history is a guide, this could be the
worst possible time to abandon a well thought out investment strategy. Now
is not the time to make market predictions. Now is the time to make good
decisions."
Other survey findings show that 45% of Hispanics expect it will take longer
than three years to recover their savings, compared with 35% of African
Americans, who have the highest percentage of individuals who are not
saving for retirement at 37%. That compares with 27% of Hispanics and 20%
of whites, who are not savings for retirement.
Geographically, the North Central region has the highest percentage of
individuals who say it will take more than three years to recover the
losses of retirement savings (44%), while those from the Northeast and West
both agree it will take fewer than three years (23%).
Differences in household income also had an impact on responses. Higher
earners are more likely to save for retirement than lower earners (85% vs.
50%). The survey also found that respondents with a higher income believe
it will take more than three years to recover retirement savings, compared
with lower earners (52% vs. 26% respectively).
Based on educational history, college graduates are more likely to believe
it will take at least three years (50%) to recover savings, versus those
who think it will take fewer than three years (25%). Meanwhile, half of
respondents who did not finish high school (51%) are not saving for
retirement, compared with only 11% of college graduates.
About Edward Jones
Edward Jones provides investment advice and financial services for
individual investors in the United States and, through its affiliates, in
Canada and the United Kingdom. Every aspect of the company's business, from
the types of investment options offered to the location of branch offices,
is designed to cater to the individual investor in the communities in which
they live and work. The firm's 10,000 investment representatives work
directly with more than 7 million clients to understand their personal
goals -- from college savings to retirement -- and create a long-term
strategy for their investments that emphasizes a well-balanced portfolio
and a buy-and-hold strategy. Edward Jones embraces the importance of
building long term, face-to-face relationships with clients, helping them
to understand and make sense of the investment options available today.
Edward Jones is headquartered in St. Louis, Mo., and can be found at
www.edwardjones.com.
Edward Jones - Member SIPC
* Survey was based on 1,000 telephone interviews of US adults and was
conducted between the dates of April 23 and 26. The margin of error was +/-
3%.