Will your retirement mantra be, “save, save, save,” or “work, work, work?” That depends on how close to retirement you are—at least, according to a recent study published by The Pew Charitable Trusts. (Source: “Are Americans Prepared for their Golden Years?,” The Pew Charitable Trusts web site, May 16, 2013, last accessed June 13, 2013.)

1. Title: Retirement Post Recession: Why It’s No Longer the Golden Years
Author: John Whitefoot, http://www.dailygainsletter.com/
Body
Will your retirement mantra be, “save, save, save,” or “work, work, work?” That
depends on how close to retirement you are—at least, according to a recent study
published by The Pew Charitable Trusts. (Source: “Are Americans Prepared for their
Golden Years?,” The Pew Charitable Trusts web site, May 16, 2013, last accessed
June 13, 2013.)
When the Great Recession hit in 2007, the oldest baby boomers were just a few short
years away from retirement. And, after a lifetime of economic expansion and planning for retirement,
they faced the real possibility of losing a significant portion of their savings. The economic downturn
also heightened retirement planning concerns facing virtually everyone else.
Many Americans who had held off saving for retirement saw their situations exacerbated by
unemployment and a bleak job market. Many more also found themselves saddled to homes that were
worth a lot less than they were just a few years before—though that’s a better predicament than those
who discovered their houses were worth less than the mortgages they were carrying.
According to the report, early baby boomers (those born between 1946 and 1955) were heading toward
retirement with enough savings to maintain their financial security. And thanks to both the “Dot-Com”
boom and housing bubble, early baby boomers had higher overall wealth, net worth, and home equity
than the Great Depression babies (those born between 1926 and 1935) or war babies (born between
1936 and 1945) had at the same ages.
But that doesn’t mean their retirement plans didn’t take a hit. Between 2007 and 2010, every age group
experienced a significant loss of wealth. Early boomers lost 28% of their median net worth. The rest of
Americans fared a lot worse.
Late boomers (those born between 1956 and 1965) lost 25% of their wealth. Those who made up
Generation X, also known as Gen-Xers (born between 1966 and 1975), were hit the hardest, losing
nearly half (46%) of their wealth, or roughly $33,000 on average. Unlike the baby boomers, the Gen-
Xers didn’t have that much savings to begin with, so their $33,000 loss was an even greater setback.
As a result, Gen-Xers will need to either postpone retirement or enjoy retirement living on a lot less.

2. Chart copyright Lombardi Publishing Corporation, 2013;
Data source: The Pew Charitable Trusts web site, last
accessed June 13, 2013.
As a general rule, many financial planners recommend saving enough to replace 70% to 100% of your
pre-retirement income when you leave the workforce. After the recession, early boomers had enough
savings and wealth to replace 70% to 80% of their pre-retirement income.
Late boomers are on track to replace just 60% of their pre-retirement income. The typical Gen-Xer,
saddled with $80,000 in debt and the lowest rate of home ownership, will only be able to replace half of
that income.

3. Chart copyright Lombardi Publishing Corporation, 2013;
Data source: The Pew Charitable Trusts web site, last
accessed June 13, 2013.
In the past, the goal of saving for retirement was to generate income, not accumulate wealth. As you
got closer to retirement, your investment needs to be rebalanced, moving away from growth to
preservation.
Where should late baby boomers and Gen-Xers look to rebuild their retirement savings? Whether it’s a
short- or long-term plan, it’s all about wealth creation. Small-cap stocks offer the highest reward
potential, but they also offer greater risk. With already depleted savings, this may not be the best
strategy.
One of the best places to turn to are defensive stocks that have a long history of paying out regular
dividends—not so you can cash in the dividends and enjoy yourself now, but so you can reinvest the
dividends and see your wealth grow long-term at an even greater rate.
Source: http://www.dailygainsletter.com/retirement/retirement-post-recession-why-its-no-
longer-the-golden-years/1086/
Copyright © 2013 Daily Gains Letter – All Rights Reserved

4. Bio:
The Daily Gains Letter provides independent and unbiased research. Our goal at the Daily Gains
Letter is to provide our readership with personal wealth guidance, money management and investment
strategies to help our readers make more money from their investments.