Ten years ago, the first baby boomers were hitting retirement age, and they were fine with that.
For many, their planning had paid off.
Their nest eggs were stocked and they were ready to reap the rewards.
If they had lost money in the dot-com bubble, they had recovered it by 2007. And, their houses had appreciated to the point they could cash out, downsize, and live large in retirement. But then the housing bubble popped, the market crashed, and many workers nearing retirement postponed their golden years in efforts to repair their savings.
You've heard this story before, of dreams lost or altered due to the 2008 financial crisis. But did you know that many baby boomers, particularly those middle-income boomers, are still clawing their way out ten years after the fact?
Today, only 2 percent of middle-income boomers believe the economy has fully recovered. On a personal level, 65 percent don't believe they have seen any personal benefit from whatever recovery has taken place.
These results are from the study, "10 Years After the Crisis: Middle-Income Boomers Rebounding But Not Recovered." The study comes from the Bankers Life Center for a Secure Retirement, and the research was conducted by The Blackstone Group in October 2016.
"Ten years ago, baby boomers had a clear vision of what a personally satisfying retirement looked like," says Scott Goldberg, president of Bankers Life. "But today, many are realizing they will not be as financially independent in retirement as they once expected."
Long road to recovery
Many boomers remain pessimistic about their financial future. This is likely due to a variety of reasons:
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- Half (52 percent) report that their savings are lower than they were before the crisis.
- Nearly half (46 percent) have less money to share with family.
- Four in 10 (40 percent) are unable to travel as much as they want to travel.
- Four in 10 are not earning as much as they used to earn (40 percent) or unable to dine out as much as they want (39 percent).
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In the wake of the Great Recession, many workers nearing retirement postponed their golden years in an effort to repair their savings.
Smaller savings
In the midst of the financial crisis, confidence in meeting daily financial obligations fell to 41 percent for middle-income boomers. That number has risen to 57 percent today.
According to the study, "long-term financial planning… hasn't fared as well. Two in 10 middle-income boomers now save a smaller percentage of their paycheck, nearly one quarter don't save anything at all, and one quarter no longer invest."
Goldberg says, "Boomers should plan for any unexpected costs that can arise, especially expenses related to retirement, such as long-term care or critical illness. Also, they should make a concerted effort to pay down debt before retiring to create more financial flexibility."
Financial professionals help confidence
According to a 2014 study by the Center for a Secure Retirement, six in 10 (59 percent) middle-income boomers do not receive professional financial guidance of any kind. However, seeking the help of a financial professional gives boomers a boost of confidence. The study reveals that financial professionals provide more optimism "for boomers to meet daily financial obligations, make smart investment decisions and have a personally satisfying retirement. They also feel better financially prepared for retirement."
For example, more than half (55 percent) of middle-income boomers who work with a financial professional are very or mostly confident in their ability to make smart investment decisions, compared to just four in 10 (44 percent) of those who do not work with a financial professional.
Today, only 2 percent of middle-income boomers believe the economy has fully recovered.
Seeking the help of a financial professional can boost baby boomer savings and financial confidence.
