A little more than 10 years ago, many seniors were diligently planning for a retirement where they could do what they wanted to do when they wanted for as long as they wanted. Based upon the world as they knew it, factoring in a bit of uncertainty and a dose of optimism, each hoped to save enough and preserve an amount that would give them flexibility and peace of mind beyond their working life.
What exactly retirement would look like to each--whether work would play a part or travel was to be the central plan, if relaxing was to be the core or doing all you always wanted to do was the focus--once age 65 was reached, some course of action would typically be undertaken. Then came the recession, and many best-laid plans were shot to pieces.
The recession affected all of us, but none more significantly than those who were nearing or already in retirement. When asked if they felt secure about their financial situation, 62 percent answered yes before the recession, according to a 2011 survey from SunAmerica Financial Group. However, the number plummeted to 36 percent at the lowest point of the recession, and even today has returned to only 44 percent.
And the feeling of doom and gloom has not passed. Among baby boomers between ages 45 and 65, 97 percent describe the state of the nation’s economy as “poor” to “not so good,” according to a 2011 study from Civano Living. Ninety-one percent say they are experiencing “not such good times”.
For many aging Americans, living on a fixed income is a reality of retired life. They must get by on an amount that they cannot easily increase while expenses continue to climb. Twenty-four percent of older Americans are not confident that their income will be enough to meet monthly expenses over the next five to 10 years, according to the National Council on Aging (NCOA). Almost 1 in 4 is not confident in or is lacking any financial plan for their retirement years.
Ten years ago, the expected retirement age was 64. That number has grown to 69 today, with pre-retirees now planning to delay retirement by five years, according to the SunAmerica survey.
Obviously, the recession and recent economic challenges have taken their toll. However, not everything is negative--we are making some progress.
• Sixty-four percent of older Americans say it is very or somewhat easy to pay their monthly living expenses now, according to the NCOA.
• If an unexpected medical issue were to occur, 71 percent believe they could handle the expenses, according to the NCOA.
• Eighty-six percent say they view retirement as a new chapter to actively pursue interests and set new goals, according to Civano Living.
Retirement is not just a time to relax and retire from the rest of the world, but rather an opportunity to live more fully and do those things you were not able to do while working and raising a family.
• Financial peace-of-mind is more important than wealth accumulation, with 82 percent of seniors feeling they have enough saved to provide for their own financial peace of mind, according to SunAmerica.
Where the recession may have caused a feeling of disconnection for many as carefully laid plans morphed into something unexpected, baby boomers maintain a desire to connect and reconnect with people in their lives in more meaningful ways. What does not kill us makes us stronger, and we survivors of this financial crisis are not going to just roll over. Hopefully we have learned from the experience and will incorporate this knowledge into our lives moving forward. Perhaps we will better realize how tenuous is our current situation and make efforts to live more fully each moment appreciating what we have now.
We have survived this recession for better or worse, but would be foolish to deny the inevitability of our next financial crisis. It is a question of when and more importantly will we have learned from our recent experiences and act accordingly?
Dave Bernard is the author of Are You Just Existing and Calling it a Life?, which offers guidelines to discover your personal passion and live a life of purpose. Not yet retired, Dave has begun his due diligence to plan for a fulfilling retirement. With a focus on the non-financial aspects of retiring, he shares his discoveries and insights on his blog Retirement–Only the Beginning.