It’s been a decade since the financial crisis—also known as the Great Recession—began to unfold in 2007. During this time, middle-income Baby Boomers were hit hard. The inflation-adjusted median household income in the U.S. fell nearly 7% from 2007 to 2010, and during those same years, the median net worth of middle-income households fell 39%.1Ten years later, many economists report that the national economy has largely recovered from the financial crisis.
However, in a new study from the Bankers Life Center for a Secure Retirement, middle-income Americans say they have not felt the benefits of any recovery.
Has the recovery missed middle-income Boomers?
Consider these statistics:
- Half (52%) report that their savings are lower than they were before the crisis.
- Nearly half (46%) have less money to share with family.
- Four in 10 (41%) are unable to travel as much as they want to travel.
- Four in 10 are not earning as much as they used to earn (40%) or are unable to dine out as much as they want (39%).
Overreliance on Social Security
In light of the statistics above, many middle-income Boomers are increasingly reliant on Social Security for their retirement income. Today, four in 10 (38%) middle-income Boomers expect to rely on Social Security for their primary source of retirement income. Before the crisis, that number was less than one in three (30%). While Social Security can provide vital benefits to retirees, it wasn’t designed to serve as one’s primary source of income. And what will happen if long-discussed changes to Social Security—such as cutting benefits, raising taxes or both—go through? Will this generation of retirees be able to truly retire as they have imagined?
A way to protect and grow retirement savings
Instead of relying too much on Social Security, there’s a way Boomers can grow their retirement savings. A Bankers Life annuity can protect Boomers’ retirement savings while providing an additional source of retirement income. Our annuities offer growth potential with fixed indexed options, and earnings accumulate on a tax-deferred basis.
Want to learn more about how Boomers have been impacted by the financial crisis? Check out the latest study released by the Bankers Life Center for a Secure Retirement, 10 Years After the Crisis: Middle-Income Boomers Rebounding But Not Recovered.
1Calculated from data found in: United States Census Bureau, Historical Income Tables: Households, Table H-6. All Races by Median and Mean Income: 1975 to 2015, http://www2.census.gov/programs-surveys/cps/tables/time-series/ historical-income-households/h06ar.xls, accessed December 8, 2016.
2Bankers Life Center for a Secure Retirement, 10 Years After the Crisis: Middle-Income Boomers Rebounding but Not Recovered, February 2017.