Close
ThinkAdvisor

Retirement Planning > Saving for Retirement

Fifth of Boomers, Gen Xers Struggling to Move Forward After 2008 Crisis: Survey

X
Your article was successfully shared with the contacts you provided.

The 2008 market crash continues to take a toll on a broad swath of Gen Xers and baby boomers, and has traumatized a group Allianz Life identified as “post-crash skeptics” in a study released Tuesday.

The Allianz Life poll asked 1,000 baby boomers and 1,000 Gen Xers with a minimum household income of $30,000 13 questions about their experiences from the 2008 market crash, such as whether their home or 401(k) had declined in value, whether they or a family member had lost a job and whether their savings and/or retirement planning had been affected.

In one of the study’s most significant findings, one-fifth of all respondents said they had experienced six or more of these events, putting them in the “post-crash skeptics” category.

Sixty-seven percent of boomers and Gen Xers polled reported that after six years, the crash still affected how they lived, worked, saved and spent.

The aftershocks are worse for the post-crash skeptics, affecting their financial attitudes and behaviors. Ninety-three percent dismissed the traditional notion of retirement as a “romantic fantasy of the past,” compared with 84% of all respondents who felt this way.

Eighty-three percent of this group said the downturn had made them more cautious and changed their thinking about risk and investments, which may handicap them in effectively saving for retirement, Allianz Life said in a statement.

By comparison, 58% of all Gen X and baby boomer respondents said they had become more cautious and revised their thinking.

The emergence of post-crash skeptics from both generations was “eye-opening,” according to Katie Libbe, Allianz Life vice president of consumer insights.

“It’s important for the financial services industry to recognize this group and consider strategies for helping them move past the barriers and biases resulting from 2008, prompting them to take a more active role in financial planning,” Libbe said in the statement.

Lost Confidence

The study found that the 2008 crisis had caused 77% of post-crash skeptics to lose confidence in financial institutions, compared with only 38% of the total respondents.

Some two-thirds of post-crash skeptics said they had changed their view of the market to risky, versus one-third of all respondents, and 43% said they had switched to more conservative investing or financial products, compared with 22% of the total respondents.

Behavioral differences between post-crash skeptics and the total group of Gen X and boomer respondents emerged from the study.

Half of the former reported that they had taken on more debt after the crash, compared with 23% of the latter, and 41% said they or a partner had lost a job, while 15% of total respondents said this. Of even greater concern, according to Allianz Life, was that 41% of post-crash skeptics said they had stopped saving for retirement since the crash, nearly three times more than Gen Xers and boomers as a group who had stopped saving.

Not surprisingly, 52% of post-crash skeptics were pessimistic about their chances for a successful retirement, saying they did not believe they would enjoy the lifestyle they wanted, compared with only 39% of the total group.

“Although investing in retirement can be daunting,” Libbe said, “the longer people refuse to address the challenges, the more difficult it will become to ensure they have adequate income for retirement — and their lifestyle will ultimately suffer.”

— Check out Dr. Klontz’s Financial Therapy Aims to Cure Your Clients’ Fear of Change on ThinkAdvisor.