During the recent presidential cycle, the current state of the U.S. economy was a hot issue, especially for middle-income Boomers who were overwhelmed by the financial crisis and recession that began to unfold in 2007.
How the financial crisis affected middle-income Boomers:
As a result of the Great Recession, the median net worth of middle-income households fell 39% from 2007 to 2010.1 Also during this time frame, homeowners lost an average of 55% of the value in their home, which for middle-class Boomers, typically makes up a significant portion of their wealth.2
This year marks a decade since the Great Recession began, and economists report that the national economy has largely recovered. However, according to a new study from the Bankers Life Center for a Secure Retirement, nearly half of middle-income Boomers believe the economy hasn’t recovered at all, and two-thirds are worried about another financial crisis in their lifetime. This uncertainty in the economy has had a big impact on how middle-income Boomers manage their finances.
How middle-income Boomers have taken steps to manage their spending, savings and investments since the Great Recession:
- More than eight in 10 (84%) have taken actions to manage their spending behavior, such as reducing their discretionary expenses (54%), reducing their recurring monthly expenses (47%) or creating and maintaining a household budget (35%).
- Nearly three in 10 (28%) have built-up an emergency fund, and nearly two in 10 (17%) now save a larger percentage of their paycheck than before the crisis.
- Three-quarters (74%) have changed their investment behavior, most often taking defensive measures, such as making more conservative investment choices (28%) or regularly reviewing and adjusting investments (18%).
Interested in learning more about how Boomer finances 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.
1Pew Research Center, The Lost Decade of the Middle Class, http://www.pewsocialtrends.org/2012/08/22/the-lost-decade-of-the-middle-class/, August 22, 2012, Chapter 7: Income and Wealth by Income Tier.
2MarketWatch.com, How the Bubble Destroyed the Middle Class, http://www.marketwatch.com/story/how-the-bubble-destroyed-the-middle-class-2011-07-08, July 8, 2011 Bankers Life Center for a Secure Retirement, 10 Years After the Crisis: Middle-Income Boomers Rebounding but Not Recovered, February 2017.