Please enable JavaScript to view the comments powered by Disqus.
Advertisement
Slide Show

1 of 6

5 Retirement Lessons Learned From the Great Recession

Getty Images

Ten years ago, retirement dreams became nightmares. Stocks plunged as the government took over Fannie Mae and Freddie Mac, Lehman Brothers went bankrupt, and the Reserve Primary Fund suffered losses, shattering investor confidence in safe-haven money-market funds. For many, it was the most hair-raising moment in a crisis that ultimately wiped out $3.4 trillion in retirement savings.

The pain didn’t stop with the market slide. The financial crisis also meant plummeting home values, stagnating wages, a loss of job security and the start of a long era of rock-bottom interest rates that proved devastating for savers.

Although stocks have now rebounded, the job market is strong, and interest rates are on the rise, many retirees and near-retirees are still feeling the effects of the financial crisis. Fifty percent of working-age households were at risk of being unable to maintain their standard of living in retirement in 2016, up from 44% in 2007, according to the Center for Retirement Research at Boston College. A decline in housing wealth is a major reason that retirement security hasn’t returned to pre-crisis levels, says Geoffrey Sanzenbacher, the center’s associate director of research. Home values and home ownership rates, he notes, still haven’t fully recovered from the recession.

Advertisement

For the older workers and retirees who survived it, the crash is much more than a historical event. It’s a reminder of all their retirement-planning strengths and weaknesses. We talked to preretirees and retirees about the lessons they learned from the financial crisis and how the Great Recession shaped their current views of the market and retirement.

SEE ALSO: 14 Retirement Mistakes You'll Regret Forever

View as One Page

Advertisement
Sponsored Financial Content