A new report from the Center for Retirement Research at Boston College finds that 40 percent of individuals 45-59 expect to retire later than they had before the downturn, with most of the respondents intending to work an additional four or more years before retirement. The survey entitled, Workers’ Response to the Market Crash: Save More, Work More, interviewed 1,317 individuals age 45-59 on how the stock market crash of 2008 has affected their retirement planning. These workers are heavily dependent on 401(k) plans, as opposed to traditional defined benefit pensions, as a source of retirement income. During the economic downturn, these plans lost about one-third of their value. Even before the crash, many older workers lacked the assets needed to enjoy a comfortable retirement.
Other findings from the survey:
- Two-thirds of workers age 45 to 59 report less retirement savings than they had before the crash.
- More than a quarter reporting a level of distress in response to the downturn equal to or greater than that caused by the 9/11 terrorist attacks.
- About 40 percent expect to retire later than they had before the downturn, most of those who intend to work longer are delaying retirement by four or more years.
- Two- thirds of respondents reported no change in how much they save for retirement in 401(k)s, IRAs, or other accounts.
- Nearly 60 percent reported that they are spending less (which is equivalent to saving more if income is unchanged).