Many American workers are still feeling the effects of the Great Recession. And that could have a big impact on how well they live in retirement.
In a new survey of workers from the Transamerica Center for Retirement Studies, 56 percent of respondents said they have not fully recovered.
Of those respondents, 37 percent said they have somewhat recovered, 12 percent said they have not begun to recover and 7 percent said they may never recover.
“So many individuals and families were hit so hard during the recession — either losing their jobs, their house or pay cuts,” said Catherine Collinson, president and CEO of the Transamerica Institute and Transamerica Center for Retirement Studies. “And if it didn’t happen to an individual, chances are it happened to a loved one.”
A high percentage of those who were unemployed at that time dipped into their retirement savings to make ends meet, Collinson said.
That kind of disruption can be extremely difficult to recover from, she said.
“When they did go back to work, they had to start over with their retirement savings,” Collinson said. “One of the basic premises of retirement savings is saving consistently over the long term, ideally starting in our 20s all the way up until the time that we retire.
“Any disruptions to that will have an impact on the size of our nest eggs when we retire,” she added.
Transamerica’s research shows two trends that may help those who are still struggling: More workers both are planning to stay in the workforce past age 65 and are planning to work at least part time in retirement.
“That is a terrific way to help bridge a savings shortfall,” Collinson said. “The longer we’re working, the longer we’re earning income and can save and the less time we’ll spend in full retirement that we’re drawing down on those savings.”
Most workers — 79 percent — said they think it will be more difficult for them to have financial security in retirement compared with their parents’ generation. Meanwhile, 76 percent said they are worried that Social Security will no longer be around when they retire.
At the same time, retirement confidence did not improve from 2016 to 2017, according to the research. To that point, 62 percent of respondents said they are confident they will be able to retire with a comfortable lifestyle — the same as the year before.
The research comes from an online survey of 6,372 American workers between August and October 2017. Those individuals, ages 18 and up, included full-time and part-time employees who work at for-profit companies with five or more people.