Wednesday, March 07, 2012

Retiree confidence levels change since the Bush years

Some people forget that G W Bush also inherited a recession. The percent of retirees in 2001 who felt very confident or somewhat confident that they had saved and invested sufficiently for retirement ranged from 74% in 2001 to 79% in 2007. In 2008, that dropped to 64% and then to 60% in 2011 as the recession ground on despite a massive influx of federal funding. Link to Research. The gloom and doom in the business community is palpable as they are hit by more and more taxes and uncertainty about health care. Expansion is mostly out of the question, unless you're a petroleum driller in North Dakota. This affects those of us who live on retirement incomes whether Social Security, or defined benefit plans or our own savings/investments. Obviously, two things jump out about those years--the current recession that started in 2007 changed the investing mix and caused retirees to reevaluate their retirement plans and spending, and the baby boomers began entering the retirement demographic.

Those of us who were born before or during WWII whose fathers fought in that war and whose parents were teen-agers or young adults during the Great Depression have a different attitude than baby boomers about saving and sufficiency. We also have benefited from stronger family safety nets and we know the difference between “wants vs. needs." The value gap will expand for Gen-Xers who were accustomed to even more “stuff” replacing spiritual and familial values. In the 1940s and 1950s even children whose parents never took them to church heard Biblical admonitions on values and thrift in school before the Supreme Court ended it in the 1960s. "Don't store up treasures here on earth, where moths eat them and rust destroys them, and where thieves break in and steal. Store your treasures in heaven, where moths and rust cannot destroy, and thieves do not break in and steal.” Matt 6:19-20

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