More than 1 in 5 say retirement savings are worse now than before the Great Recession

Section 5: Generations and the Great Recession

More than 1 in 5 say retirement savings are worse now than before the Great Recession

The nation’s worst economic meltdown since the Great Depression has had a disproportionate impact across generations.

While Americans of all ages have felt the effects of the recession, Millennials have been hit harder on the job front, and Boomers and Generation Xers have suffered the greatest losses in terms of home values, household finances, and retirement savings.

The Silent generation has survived the economic downturn in better shape. With the help of income from Social Security, Silents view their financial situations more positively than do younger generations.

Moreover, a report by the Pew Research Center’s Social & Demographic Trends project shows that Americans 65 and older have made dramatic gains relative to younger adults in their overall economic well-being over the past quarter of a century. (For more, see Pew Social & Demographic Trends’ “The Rising Age Gap in Economic Well-Being,” Nov. 7, 2011.)

In the current poll, Silents express a higher level of satisfaction with their personal financial situation than do younger people. Seven-in-ten Silents say they are satisfied with their current finances (35% are very satisfied, another 35% are somewhat satisfied).

Among Boomers, six-in-ten are satisfied with their personal financial situation, with only one-in-four (26%) saying they are very satisfied. Similar shares of Gen Xers (21%) and Millennials (23%) say they are very satisfied with their finances.

In a survey last year by Pew Social & Demographic Trends, nearly half of the public (48%) said that their household finances were in worse shape than before the recession.

Boomers suffered the most in this regard: More than half of Boomers (54%) said their household finances gotten worse over the course of the recession, with as many as one-in-five saying their finances were in much worse shape.

Among Silents, 44% said they were in worse financial shape as a result of the recession, but just as many volunteered that their finances had not changed during the recession.

Millennials, despite their precarious situation in the job market, were more ly than any other generation to say their finances had improved over the course of the recession (33%). Gen Xers said they suffered more than Millennials but slightly less than Boomers. (For more, see Pew Social & Demographic Trends’ “How the Great Recession Changed Life in America,” June 30, 2010.)

Gen Xers Feeling More Pinched

Overall, Americans are less satisfied with their personal financial situation now than they were in 2009. Millennials, Gen Xers and Boomers all express lower levels of satisfaction now than they did two years ago. Silents’ assessments about their personal financial situation have not changed significantly over this period.

Gen Xers show the most dramatic change in this regard. In the current survey, 57% of Gen Xers say they are satisfied with their personal financial situations while 42% are dissatisfied. In early 2009, more than twice as many Gen Xers were satisfied than dissatisfied with their personal finances (68% vs. 30%).

More Boomers also express dissatisfaction with their finances: 39% are currently dissatisfied, compared with 32% two years ago. Millennials’ views of their personal finances, those of Silents, have changed very little since 2009.

The increased anxiety about personal finances among Gen Xers and Boomers may be fueled in part by mounting concerns about retirement savings.

Although the stock market has rebounded somewhat from its low point in early 2009, Americans have less confidence now than they did in early 2009 in their ability to provide for themselves in retirement.

In 2009, roughly seven-in-ten adults were at least somewhat confident that they would have enough income and assets to last throughout their retirement years. In the current poll, 63% expressed at least some confidence.

Over the past two years Gen Xers have lost a great deal of confidence in their ability to provide for themselves in retirement. In the current survey, only 18% of Gen Xers say they are very confident they will have enough income and assets to last throughout their retirement years, down from 30% who were very confident in just two years ago.

Boomers, Xers, are not highly confident in their retirement finances, though their opinions are largely unchanged from two years ago. Just one-in-five Boomers (20%) say they are very confident in their retirement finances; in March 2009, 25% said the same.

Older Workers and Retirement

Retirement is still a long way off for most Gen Xers, but it is right around the corner for many Boomers. In the current survey, about two-thirds of Boomers (67%) say they are not retired. Among that group, the average age at which they expect to retire is 66. Nearly one-in-four (23%) say they expect to work until they are 70 or older, and 12% say they never plan to retire.

The recession has had a major impact of some Boomers’ retirement plans. Among Boomers ages 50-61 who are still in the labor force, fully two-thirds (66%) say they might have to delay their retirement because of current economic conditions.

The vast majority of Silents are already retired – 90% in the current survey. A small share of Silents and Boomers who are retired report that they still do some type of work for pay. Among older Boomers and Silents who are not yet retired, 42% say they already have had to delay their retirement because of the economy.

Housing and Jobs

The collapse in the housing market has had relatively little impact on Millennials, largely because they are less ly than older Americans to own a home. In a Pew Research survey conducted earlier this year, only 18% of Millennials reported that they owned their own home.

The share of homeowners among Gen X is much higher – 57%. And among Gen Xers who own homes, three-in-four say they bought their home in 2000 or later, during the dramatic rise and fall in home values.

One-in-four of these homeowners say their house is worth a lot less than it was before the recession, and 21% say they are underwater on their mortgage – that is, they owe more on their home than they could sell it for today.

Boomers are more ly than Gen Xers to own a home (75%), but they are less ly to have bought their home during the real estate bubble of the past decade. Fewer Boomers than Gen Xers (13%) say that they are underwater on their mortgages.

Silents – the vast majority (82%) of whom are homeowners – are even more removed from the housing crisis.

Only 24% of homeowners from the Silent generation bought their home in the past decade; twice as many (50%) bought their home before 1990.

Just 4% of Silents report that they are underwater on their mortgages. (For more, see Pew Social & Demographic Trends’ “Home Sweet Home. Still.” April 12, 2011.)

Finding a job during the recession has been a challenge for Americans of nearly all ages, but Millennials have been hit particularly hard. Over the course of the recession, the overall unemployment rate increased by roughly five percentage points. The increase was sharpest among the nation’s youngest workers.

Pew Social & Demographic Trends’ 2010 report on the differential impact of the recession showed that 19.1% of workers ages 16 to 24 were unemployed in the fourth quarter of 2009, according to the Bureau of Labor Statistics. That was eight points higher than the unemployment rate for this age group in the fourth quarter of 2007.

Both the levels and changes in the unemployment rate were less sizable among older age groups.

In the current survey, two-thirds of Millennials (67%) say they are employed: 38% are employed full-time and 29% are employed part-time.

Among Millennials who are not currently employed, 63% say they are looking for work. A similar proportion of Gen Xers who are not working (59%) say they are looking for a job.

Among Boomers, only 27% of those who are not working are actively looking for work.

Family Responsibilities

In addition to the broader economic forces that have battered Americans over the past few years, there are other financial burdens and responsibilities closer to home. Many parents and children feel a sense of financial obligation to each other. With the population growing older, the need for family members to provide assistance to one another may increase.

Roughly six-in-ten Americans (62%) think that at some point in their life they will be responsible for caring for an aging parent or another elderly person. Another 13% volunteer that they are currently caring for an aging adult or have done so in the past.

Large majorities of Millennials (86%) and Gen Xers (78%) say they think they will end up caring for an aging parent or another elderly person. Fewer Boomers (52%) expect to care for an aging adult, but 20% say they currently do so or already have done so.

There are wide generational differences in opinions about the responsibilities of family members to each other. On issues relating to aging parents, Millennials advocate a greater level of responsibility on the part of both the parents and the adult children than do older generations.

More than nine-in-ten Millennials and Gen Xers say adult children have a responsibility to care for their elderly parents if they need help. A strong majority of Boomers (83%) agrees this is a responsibility. Most Silents (73%), many of whom are elderly parents themselves, also see this as a responsibility. However, more than one-in-five disagree.

Fully seven-in-ten Millennials (71%) and 64% of Gen Xers say adult children have a responsibility to take an elderly parent into their home if that’s what the parent desires. Among Boomers, 60% say this is a responsibility. Silents are much less ly to agree: 48% say adult children have this responsibility, nearly as many (46%) say they do not.

Millennials are also more ly than those in older generations to say parents have an obligation to leave an inheritance for their children. Nearly half (46%) say parents have a responsibility to save money to hand down to their children after they die. Gen Xers are less ly to see this as a responsibility (36%). Just 26% of Boomers and 22% of Silents agree.

There is much more agreement across generations on the two additional items tested in the poll. Most adults, regardless of generation, agree that parents should pay for a child’s college education. Roughly six-in-ten Millennials, Gen Xers, Boomers and Silents say this is a responsibility.

And most adults agree that parents are not obliged to take in their adult children. Only about one-third from each generation says parents have a responsibility to allow their adult child to live in their home if the child wants to. Roughly two-thirds from each generation say this is not a parent’s responsibility.

Whether or not it is viewed as a responsibility, many families are living together in multi-generational households these days. A recent Pew Research analysis of data collected by the U.S.

Census Bureau showed that a record share of Americans now reside in a multi-generational household and that, for many, this has become an economic lifeline. An earlier Pew Research analysis showed that during the recession, many Millennials moved back in with their parents (as many as one-in-four adults ages 18-24 did this).

(For more, see Pew Social & Demographic Trends’ “Fighting Poverty in a Bad Economy, Americans Move in with Relatives,” Oct. 3, 2011.)

Families Providing Financial Support

Within families, generations support each other financially – and the support runs both ways. Among adults who have a parent age 65 or older, 39% say they have given financial support to their parent in the past 12 months. Among adults ages 65 and older, a similar share (44%) say they have given financial support to an adult child.

This financial assistance tends to be more for ongoing expenses than a one-time gift or loan. Among adult children who have given their parents money over the past year, eight-in-ten say that money was for ongoing expenses. Similarly, among older adults who have given money to their adult children, about seven-in-ten say the money was for ongoing expenses.

Survey respondents are more willing to acknowledge giving financial support than they are to say they have received support. Among adult children with a parent age 65 or older, 21% say they have received money from their parent in the past 12 months. Among older adults, just 10% say they have received financial support from their adult children.

The share of adult children who have provided financial support for an elderly parent is significantly higher among blacks and Hispanics than among whites. Fully 64% of black and Hispanic adults with a parent or parents age 65 or older say they have given their parents money in the past year. Among non-Hispanic whites with a parent age 65 or older, only 30% have given money to a parent.

Источник: https://www.pewresearch.org/politics/2011/11/03/section-5-generations-and-the-great-recession/

Survey: Nearly 1 in 4 American Adults Are Worse Off Now Than Before The Great Recession | Bankrate.com

More than 1 in 5 say retirement savings are worse now than before the Great Recession

The Great Recession may have ended a decade ago — but when it comes to Americans’ finances, many have yet to bounce back.

A nationwide Bankrate survey found that nearly half (48 percent) of Americans who were adults when the downturn began in December 2007 have seen no improvement in their financial situation.

One in four respondents (or 25 percent) report that their overall financial situation is about the same as it was when the worst economic crisis in nearly 80 years hit, while 23 percent say their situation is worse.

That comes at a time when the traditional economic data tells a story of booming growth and maximum employment. The expansion is poised to become the longest on record in July, and the unemployment rate is now at a near half-century low after 104-straight months of job creation.

Even though nationwide numbers paint a rosy picture overall, the survey underscores that such a recovery hasn’t been the reality for all Americans.

“The echoes of the financial crisis and Great Recession remain very present in the financial lives of many Americans, despite the improvement in the broader economy,” says Mark Hamrick, Bankrate’s senior economic analyst. “While some have managed to prosper in the decade since, there are still tens of millions who are struggling to even get back to where they were before the economy took a turn for the worse.”

Majority of Americans report negative impact from Great Recession

Bankrate’s survey delved into the experiences of Americans who were adults during the Great Recession, and the majority (55 percent) report that they were negatively impacted in some way.

Most notably, two in 10 Americans reported that their home lost value during the downtown. Nineteen percent lost money in the stock market, another 19 percent incurred substantial debt and 15 percent said either they or their partner lost a job. Seven percent of individuals depleted their emergency funds, while 6 percent tapped into their retirement savings.

It’s not surprising that many Americans’ financial situations still haven’t recovered from those negative outcomes, says Karen Dynan, an economics professor at Harvard who formerly worked for both the Federal Reserve’s board of governors and the Department of the Treasury.

“The recession and the weak recovery that followed it were really bad periods for some families,” Dynan says. “Given job loss and weak wage growth, a lot of families depleted any savings they had just to get by. We saw people running down their savings and cashing out their 401(k)s to make ends meet.”

Economic recovery hasn’t been even, survey finds

Just as the survey indicates that not all Americans have fully bounced back, the extent of individuals’ recovery has also been largely uneven.

Individuals who said they were negatively impacted by the Great Recession were more ly to be doing worse off now. More than a quarter (26 percent) of adults whose finances were harmed by the downturn now face a less favorable situation, compared with 14 percent of those who said they were not negatively impacted.

At the same time, more than a quarter (26 percent) of women said they were worse-off now, compared with 19 percent of men. Individuals with lower incomes and educational levels were also more ly to report that they were doing worse now than before the recession.

[READ: Watch for these 6 indicators to know when a recession could be coming]

Of the different generations, 25 percent of Baby Boomers said they were worse off, compared to just 19 members of the Silent Generation as well as Millennials.

Contributing to the general uneven nature of the economic recovery is underemployment, Dynan says. Individuals working part-time for economic reasons, such as not being able to find full-time work, have only just recently matched its pre-crisis level, according to the Labor Department.

At the same time, prime-age labor force participation (or the rate at which individuals aged 25 to 54 are working) recently returned to a “healthy level,” Dynan says, though it’s still below the pre-crisis level.

“The standard measure of unemployed has been at pre-crisis levels for several years now, but it took longer for other measures — people working fewer hours than they wanted — to recover,” Dynan says. “What all this means is that while a lot of people may be back in jobs with growing wages, some are only beginning to rebuild the wealth they lost during the long earlier period of weakness.”

Why many Americans haven’t seen much improvement

But another factor is contributing to that uneven recovery, and it’s a harsh reality for the many individuals trying to enjoy the benefits of the current expansion: Wage growth has been stagnant.

Despite the largely positive gains associated with the job market and the economy, many Americans’ wallets have yet to feel the results.The majority (54 percent) of Americans said their wages or salaries haven’t recovered to their pre-recession level. Thirty-two percent said they were about the same, while 31 percent said they were worse off.

A slow pace of wage growth, even while the unemployment rate sits at historic lows “has been the puzzle of the economic recovery,” says Gary Burtless, a senior fellow in Economics Studies at the Brookings Institution in Washington, D.C., who works with the Future of the Middle Class Initiative. “We haven’t seen very much acceleration in wage gains or in the compensation per hour gains of American workers. That’s something of a mystery.”

Average hourly earnings on an annual basis breached 3 percent in October for the first time since 2009 — an occurrence that economists say should’ve occurred much earlier, economic theory suggesting that a low unemployment rate puts upward pressure on wages.

Analyzing data from the Bureau of Labor Statistics, Burtless estimates that since the third quarter of 2009 — around the time when the recession ended — the share of laborers’ business sector output (or the percentage of economic output that workers get as compensation for their labor) has ranged between 56 and 58 percent. At the beginning of this century, that share was closer to 64 percent.

In Bankrate’s survey, most of the individuals who saw improvement in their wages belonged to the top income level, or those who make $80,000 a year or more, according to the survey.

The majority (65 percent) of individuals in this income category reported that their incomes were either much better or somewhat better since the crisis.

That’s in line with Burtless’ analysis, which also found that the share of output is disproportionately going toward top earners.

“If you just look at the labor share, it turns out that inequality of the share has been going up,” Burtless says. “So the top-paid people across a huge range of industries and businesses are much better paid compared with the average worker.”

More than half (58 percent) of women reported that their pay hadn’t fully improved, compared with 48 percent of men.

About 60 percent of individuals whose highest educational level is a high school diploma or less said their pay hadn’t fully recovered to its pre-crisis level, compared with 52 percent for individuals with some college or a 2-year degree and 46 percent for both bachelor’s and master’s degree holders.

Nearly a quarter (26 percent) of individuals in the Baby Boomer generation said their pay is worse, compared with just 16 percent of Millennials who were adults in 2007. More than one-third (36 percent) of respondents who reported that either they or their partner lost their job claim that their pay is worse now than before the recession.

Burtless also blames depressed wage growth on other longer-term trends. Since the 1980s, workers’ bargaining power has been declining, amid globalization and de-unionization.

“Workers in those areas of the economy have suffered a loss of wage share because they know that their employer can pretty much produce the same thing elsewhere.

They realize if their wages get too high, it’s a big part of their business,” Burtless says.

“Not having an institution that represents their interests or not having state legislatures in their corner protecting their interests is going to mean fewer wage increases and less fringe benefits.”

Americans’ perceptions that wages are worse than before the crisis may also be partly psychological, meaning “it’s the perception that other people are faring very well, and you’re not faring as well,” Burtless says. Median household income reached $61,372 in 2017, the third-straight annual increase, which brought it to a pre-crisis level, the Census Bureau reported on Sept. 12. But still, questions remain, he adds.

“The economic expansion began 10 years ago.

Certainly in the last five years, workers have seen their pay increase, and the pay increases have more than offset for most wage ranges in our economy all of the losses associated with the Great Recession,” Burtless says. “But of course, the economy is considerably bigger than it was at the end of the last expansion. Why aren’t wages even higher than they are right now?”

Lessons from the Great Recession: Pay off debt, save for emergencies

But despite the uneven recovery, the Great Recession has caused many Americans to try and put one-foot forward. Only 29 percent say they have not changed their financial habits as a “direct result” of the downturn.

Among those who did make changes directly because of the recession, 29 percent say they have placed a priority on paying down debt. About a quarter (23 percent) are now saving more for emergencies, and 18 percent are saving more for retirement.

These are important steps that Americans should be taking now, in preparation for the next downturn, Hamrick says.

“It is critically important for Americans to try to save now for emergencies and for retirement while paying down or paying off debt,” Hamrick says. “Don’t wait to prepare until after it is too late when a financial storm has already arrived.”

Twelve percent of respondents also reported that the recession led them to look for a better job, and another 12 percent now have a more affordable home or mortgage. Ten percent invest less in the stock market, and 9 percent no longer want to own a home because of the recession.

Though some groups had warned about a housing bubble, both the downturn and its severity proved itself to be largely unexpected. Most economists say it’s unly that the next downturn will be as severe as this one, but busts following booms are still an inevitable part of the business cycle, Hamrick says.

“While the current economic expansion is on track to set a record for duration, there will be a downturn at some point,” he says. “We just don’t know when.”

Methodology

Bankrate commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc.

Total sample size was 2,740 adults, including 2,315 who were 18 or older when the recession began born before 1990. Fieldwork was undertaken on May 15-17, 2019. The survey was carried out online.

The figures have been weighted and are representative of all U.S. adults (aged 18+).

Источник: https://www.bankrate.com/personal-finance/smart-money/great-recession-survey-june-2019/

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