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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