Midlifers are the most likely among all age groups to say they lost money on investments since the Great Recession began, according to a Pew Research Center study released Monday.
They also are the most likely (57 percent) to say their household finances have worsened. And a higher share of midlifers than older Americans (but not younger ones) say they have cut spending in the past year.
Among those between the ages of 50 and 61 who are approaching the end of their working years, three out of five say they may have to postpone retirement. According to employment statistics, the older workforce is growing more rapidly than the younger workforce.
If that's not an eye opener, then I don't know what is. The recession is forcing many of us to reassess where we stand financially and what our goals are.
Even though the stock market has jumped more than 50 percent from its bottom in March 2009, Americans have lost their confidence in their ability to afford retirement. About one third of them now say they are "not too" or "not at all" confident: that they have enough income and assets for retirement, up from 25 percent in February 2009.
Want some more pessimism? Among those 62 and older who are still working, 35 percent say they have already delayed retirement because of the recession. And 40 percent say that they had had to withdraw money from their savings account, 401(k) account or some other retirement account to pay their bills during the recession.
We're also leery of what the government has in store for us going forward, and what that might mean to our finances.
In 1970, when the oldest of the current midlifers were in their early 20s, the total publicly held national debt was about $283 billion, or about 28 percent of the Gross Domestic Product. Now, as the oldest midlifers approach age 65, the federal debt is an estimated $9 trillion — or 62 percent of GDP – creating IOUs that members of younger generations may be paying down for decades.
However, the Pew Research survey finds little appetite for deficit reduction proposals that would take a bite out of their own pocketbooks. For example, 68 percent of midlifers (compared with 56 percent of all adults) oppose eliminating the tax deduction for interest paid on home mortgages.
Another 80 percent (compared with 72 percent of all adults) oppose taxing employer-provided health insurance benefits; and 63 percent (compared with 58 percent of all adults) oppose raising the age for qualifying for full Social Security benefits.
Some of these survey results are just plain shocking to me. I've never considered raiding my 401(k) or a savings plan to pay bills, even though it's meant carrying more debt on credit cards than I would have liked in recent years. To me, that's not smart planning.
I'm fully confident the economy is going to come back, and that my income will go back up after falling in 2009 from 2008 and in 2010 from 2009. Yet, at age 46, I'm among the younger midlifers, so I'm not overly concerned yet about retirement.
I'm also concerned that more of us than any other demographic has lost money on investments during the recession. Yes, I lost money, but my investments have recouped all of those losses, and made some money in the past 18 months. If some of you have lost money, it means you haven't been a wise investor and have probably taken on more risks than necessary.
It's not too late. While there are many things about my personal finance situation that can be improved, I'm conscious of what needs to be done.