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Baby Boomers Still Shaken by Financial Crisis

April 25, 2016

It’s 2016, but the financial crisis of 2008 is still top of mind for many baby boomers—and it’s impacting their saving and investing habits. 

A new study finds that a significant number of boomers experienced economic trauma following the crash, including a reduction in the value of their home or 401(k), job loss (personal or for a family member), or impacted savings or retirement plans.

For those hit hardest by the crisis—a cohort the study deemed “post-crash skeptics”—93 percent say the crash still greatly affects how they live, work and spend. Among post-crash skeptics, more than two-thirds (67 percent) now see the market as risky, and fully 43 percent have switched to more conservative investment approaches or financial products.

Debt has also become a way of life for many boomers. Fully 48 percent say that credit cards now function as a survival tool for them.

That increased debt load and reluctance to participate in the market could leave boomers less prepared for retirement. In fact, a new report from Black Rock found that the average boomer has a goal of building a nest egg large enough to provide a retirement income of $45,500 a year. However, the average retirement portfolio has just $136,200 in it. That translates to a yearly retirement income of $9,129. 

Many boomers realize this is a problem. Fully 82 percent say they now see a traditional retirement as a romantic fantasy of the past. More than 8 in 10 say that a retirement starting at age 65 and spent “dong exactly what you want” is now unrealistic.

However, awareness has yet to spur action for many: while 84 percent of boomers agree there is a retirement crisis, the study found that 65 percent of boomers “just have this feeling that everything’s going to work out.” 

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