Complete Description:In 2009, the Center for Retirement Research analyzed responses to the financial and economic downturn of workers approaching retirement. The CRR surveyed 1,317 workers age 45 to 59 between
July and August 2009. The main results showed a significant rise in expected retirement ages,
but little change in retirement saving. While contributions to retirement
savings plans were little changed, workers approaching
retirement spent less and paid down debt. However, the survey showed considerable variation
based on an individual’s asset losses, years to retirement,
and psychological reaction but interestingly,
standard demographic variables, such as race
and gender, are not correlated with how one reacts to
the downturn. A preliminary analysis focused
on a sub-sample of 358 individuals with substantial
financial losses that received financial advice as part of an experimental intervention.
Of those receiving “expert” advice, about 60 percent who initially did
not plan to respond to the downturn reconsidered,
suggesting that credible information can substantially
change both retirement and savings behavior.
Among those who had a strong initial preference for working
longer to offset losses, receiving a clear explanation of
the trade-off between working longer and saving may
convince some to save more as well.