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The Associated Press March 2, 2011, 2:17PM ET

Retirement worries: Deficit, jobs top the list

The federal budget deficit has investors so concerned that it's now tied with unemployment as their biggest worry, says a survey released Wednesday. It was conducted for Wells Fargo & Co. by Gallup.

When asked to rate potential factors affecting the investment climate, 71 percent of respondents said those two issues are hurting the investment climate "a lot."

The price of energy was cited by 60 percent, followed by the financial condition of state and local governments, cited by 58 percent.

Just over half of the investors -- 51 percent -- cited "a politically divided federal government" as a factor, surpassing concerns about home price values at 46 percent, and the availability of credit, cited by 38 percent.

Although investors worry about those issues, they are more optimistic than they were in February 2009, just before the stock market hit bottom. Still, positive perceptions are well below pre-recession levels.

The survey is used to calculate the Wells Fargo/Gallup Investor and Retirement Optimism Index, which rose to 42 in February. That's up sharply from its all-time low of negative 64 in February 2009. Still, it lags considerably behind the pre-recession score of 90 in February 2007.

The index is based on the results of seven core questions that were asked during telephone interviews conducted by Gallup with 1,007 investors aged 18 and older from Feb. 1 through Feb. 8. The poll's margin of sampling error is plus or minus 4 percentage points.

The Index had a baseline score of 124 when it was established in October 1996. It peaked at 178 in January 2000, at the height of the dot-com boom.

Investors who were able to establish enough of a nest egg and retire are significantly more optimistic than those still working and piecing together a retirement plan.

The optimism index for retirees hit 61, nearly twice the optimism level of those still working, a score of 35.

The dramatic difference likely stems from the fact that 49 percent of the retired workers reported having guaranteed retirement income from a pension. Just 39 percent of those still working will have pension income.

"The resources for society to care for people in retirement seem to be shrinking across the board," said David Carroll, head of Wells Fargo Wealth, Brokerage and Retirement. "The pre-retirees are coming to the stark realization that they'll be responsible for their financial well-being into the future and the prior generations weren't as dependent on themselves."

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