More Gloom About Retirement

The bounceback from the financial crisis of 2008 and recovery in the stock markets hasn’t helped the confidence of many Americans about their retirements. In 2009 only one in four adults was “not confident” about being financially prepared for retirement. The number increased to four in 10 Americans being anxious about their retirements this year, according to surveys taken regularly by Pew Research Center. A major change is that younger adults now are already worried about their retirements. In past surveys, the anxious tended to be those age 50 and older.

The changes are due to the long-term effects of the financial crisis. Many people now recognize that we’re not going to have a quick recovery and return to normal growth. They also realize that the boom times of the mid-2000s or late 1990s are distant memories. Younger people now largely are unemployed or underemployed and realize they might not be able to save enough to accumulate retirement wealth. They also realize that help from governments and employers won’t be available.

As I’ve been saying for years, retirement has changed and will change again. Americans more and more are going to have to rely on their own resources to fund retirement. That means saving a higher percentage of your income and investing better than previous generations. It also means maximizing your opportunities to shift risk to others through insurance and other means.