The Financial Crisis, Great Recession and Retirement Security
The recession may still hold the greatest consequences for older Americans, who have the least time to recover from its effects before reaching retirement. The housing market remains weak, leaving many who are dependent on the worth of their home with an uncertain asset at best. In addition, workers may have been forced to dip into their retirement savings during a period of unemployment, and employment instability reduces Social Security and pension credits.
Using data from the Health and Retirement Study (HRS), Richard Johsnon, Barbara Butrica and Karen Smith of the Urban Institute will examine the likely impact of the financial crisis and its aftermath on retirement security for workers who were in their 50s and 60s when the economic downturn began. How common was unemployment among older workers in the Great Recession and its aftermath? How difficult was it to become re-employed? How did job loss affect economic well-being? How did the crash in the housing and stock markets affect retirement preparedness?
The results from the analyses will be used in the Urban Institute’s Dynamic Simulation of Income Model (DYNASIM3) to project future retirement incomes to reflect the effects of the Great Recession and financial crisis.