Americans cut college and retirement savings amid bad economy

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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.

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-- Walter Hamilton