Americans cut college and retirement savings amid bad economy

A sad old joke holds that people worried about their finances stuff their savings under their  mattresses.

Sadder still is that many Americans actually may be doing that.

More than one-quarter of Americans polled in a new survey said the best place to stash their limited savings is underneath their mattresses.

As with other recent studies of consumer attitudes in the troubled economy, the survey released Monday by Allianz Life Insurance Company of North America reflects the grim financial outlooks of many Americans, particularly toward their retirement and college-savings prospects.

Slightly more than half of working-age Americans question whether 401(k) and similar retirement plans will provide enough money for secure retirements.

Nearly half say the troubled economy has had an influence on their retirement saving. One in five people has cut spending to maintain their retirement savings levels, while 30% have either reduced their retirement contributions or stopped making them altogether.

“Given the gut-wrenching events and market volatility of late summer, consumers are questioning traditional retirement savings vehicles and changing their savings habits,” said Katie Libbe, a consumer expert at Allianz Life. “Recent events have only deepened the uncertainty many have felt about retirement since the market meltdown of 2008.”

The picture isn’t much better for college savings, with one in four people reducing or stopping their college contributions.

RELATED:

Weak stock market may be hurting weak economy, report suggests

Golden years take on new meaning: Americans expect to work

In paying for college, better to be lucky than smart

-- Walter Hamilton

Photo: A game of shuffleboard. Credit: Mark Boster / Los Angeles Times

Nobel economics prize won by two American academics

Two American scholars Monday won the Nobel Memorial Prize in Economic Sciences for their separate research examining the cause-and-effect relationships between economic policies, such as tax cuts and interest rate hikes, and the broader economy.

Thomas J. Sargent of New York University and Christopher A. Sims of Princeton University, both 68 years old, will share the $1.5 million award.

In announcing the prize, the last of the Nobel awards announced this year, the Royal Swedish Academy of Sciences said Sims and Sargent's pioneering work in the 1970s and '80s had been adopted by researchers and policymakers throughout the world and helped in understanding how economic shocks and systematic policy shifts affect the economy in the short run and long run.

Sargent and Sims conducted their research independently, and one of the big challenges they faced was the-chicken-or-the-egg problem in economics, that is, whether policy affects the economy or the other way around. Because economics experiments are difficult to perform in the real world, the Nobel committee said "the laureates' foremost contribution has been to show that causal macroeconomic relationships can indeed be analyzed using historical data, even in cases with two-way relationships."

Their work is relevant today as the United States and Europe grapple with anemic growth, high unemployment and budgetary woes in the wake of the recent global financial crisis and recession.

The Nobel committee said analytical methods developed by Sargent and Sims could help answer such questions as: How are gross domestic product and inflation affected by a temporary interest-rate hike or a tax cut? And what happens if a central bank makes a permanent change in its inflation target or a government changes its goals in budget balancing?

Sargent, a native of Pasadena, and Sims, who was born in Washington, D.C., both received their PhD degrees from Harvard University in 1968.

Sims said he was sleeping when he got the call from the Nobel committee early Monday informing him of the award.

"Actually, at first we were called twice and my wife couldn't find the talk button on the phone so we went back to sleep," he said, speaking by phone to a news conference in Stockholm, where the prize was announced.

Last year’s Nobel economics prize went to three researchers, including two Americans, for helping to explain such phenomena as high unemployment.  

ALSO:

CalPERS gives top execs $4.5 million in bonuses

Port of Long Beach to acquire Long Beach World Trade Center

Transit-oriented North Hollywood residential complex is for sale

-- Don Lee in Washington

Photo: Christopher Sims, left, and Thomas Sargent are sharing the 2011 Nobel economics prize. Credit: AFP / Getty Images