Big retirement fear: Outliving your savings

Almost half (46%) of investors in this country are worried they will outlive their savings in retirement, a new survey shows.

In fact, 36% of retired investors and 50% of investors who aren't retired are concerned they will run out of their own money so that eventually their main source of retirement income will be Social Security, according to the Wells Fargo/Gallup survey of 1,011 investors who have $10,000 or more in savings and investments. About 58% of respondents have an income of less than $90,000; 42% make $90,000 or more. The survey was conducted in August.

"There are tangible reasons for a lot of people to worry," says Karen Wimbish, director of retail retirement for Wells Fargo.

Many people haven't saved enough, and some lost a lot of money during the Great Recession and "haven't healed" from the experience, she says. "They are still hesitant to put money in the stock market even though the market is the best way to grow your savings."

The survey found that investors say that about 38% of their retirement savings is invested in the stock market; for retirees, it's 33%.

"Some are investing in the market, but they are doing it reluctantly," Wimbish says. "We tell people to start saving as much as you can as soon as you can."

Gary Schatsky, a New York City financial planner and president of ObjectiveAdvice.com, says, "With incomes dropping, with employment uncertainty increasing and with health care costs skyrocketing, one can only conclude that some level of concern (about running out of money) is warranted."

It's gratifying that people are concerned because those who are unconcerned aren't taking many steps to protect themselves, says Schatsky, who was not involved in the new research.

Another recent survey from bankrate.com found that many Americans (55%) with significant savings fear going broke in retirement, but they aren't willing to cut back on their current lifestyle to save more for the future.

The Wells Fargo report found retirees say that Social Security accounts for about 30% of their retirement income. Non-retirees expect Social Security to account for about 26% of their annual income.

About 69% of investors say they're confident that between their savings and Social Security, they'll have enough money to maintain their lifestyle in retirement.

Other findings of the Wells Fargo survey:

• 60% of investors say caution when investing in the stock market is wise because it protects people from possible market losses; 37% think it's unwise because it prevents investors from realizing significant market gains; 3% don't know or refused to answer the question.

• 68% of investors say they actively choose stocks for their long-term investment accounts, and 29% say they consciously avoid stocks in long-term investment accounts; 3% don't know or refused to answer the question.

• Of the investors who say they avoid stocks, more than half (56%) say they are not confident they can reach their financial goals without stock market exposure, but they still think it's better to avoid the risk.

• 51% of all investors think the market will have a correction later this year; 41% don't think there will be a correction; 8% don't know or didn't answer the question.

• If there is a correction, 63% say they'll ride it out and stay with their current investment allocation; 25% will see it as a buying opportunity and invest more in the market; 10% will exit the market and move money into cash; 2% don't know or refused to answer.