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Researchers : Workers’ Response to the Market Crash: Save More, Work More?
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.
Date Published:Monday, February 1, 2010
Author:Steven A. Sass, Courtney Monk, and Kelly Haverstick
Funding Agency: Social Security Administration
Type: Brief; , Issue Brief
Source: Survey data;
Language: English
Audience: Researcher