Great Recession, weak recovery to lower standard of living for near-retirees
For the first time since the New Deal, a majority of Americans are headed toward a retirement in which they will be financially worse off than their parents, jeopardizing a long era of improved living standards for the nation's elderly, according to a growing consensus of new research.
The Great Recession and the weak recovery darkened the retirement picture for significant numbers of Americans. And the full extent of the damage is only now being grasped by experts and policymakers.
Even before the downturn destroyed 40 percent of Americans' personal wealth and an environment in which savings accounts pay almost no interest, there was mounting concern for the long-term security of the country's rapidly graying population. Although the surging stock market is approaching highs, most of these gains are flowing to well-off Americans who are in relatively good shape for retirement.
Liberal and conservative economists worry that the decline in retirement prospects marks a historic shift in a country that previously has fostered generations of improvement in the lives of the elderly. It is likely to have far-reaching implications, because an increasing number of retirees may be forced to double up with younger relatives or turn to social-service programs.
“This is the first time that Americans are going to be relatively worse off than their parents or grandparents in old age,” said Teresa Ghilarducci, director of the Schwartz Center for Economic Policy Analysis at the New School for Social Research.
The center's findings are similar to those recently uncovered by researchers at the New School, the Heritage Foundation and the Senate's Committee on Health, Education, Labor and Pensions.
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