Benefits November 15, 2011

Could Take Years to Rebuild Savings after Recession

November 15, 2011 (PLANSPONSOR.com) - According to the most recent COUNTRY Financial survey, 58% of those closest to retirement (ages 50 to 64) had to rely on savings to get through the recession.

Reported by

Rebecca Moore

Of those, 34% say it will take them two years or more to rebuild.

Only half (51%) of respondents indicated they are prepared to handle another recession financially. Due to the recent economic crisis, a quarter of adults have no savings whatsoever to rely on.

For those that had savings, 55% used that safety net during the recession, and 62% of them say it will take at least a year to rebuild their reserves.

One-third (32%) of respondents say rising food and gas prices threaten their savings plans. Americans of all ages cited this as their biggest savings obstacle. Another 18% point to job loss or a pay cut as a key barrier.

College loan debt and a high unemployment rate may be impacting “Gen Y.” Twenty percent say too much debt is their greatest obstacle to saving and investing, the highest among all age groups. Those ages 40 to 49 are most likely to say job loss or a large pay cut is the culprit for their inability to save (26%).

Keith Brannan, vice president of financial security planning, pointed out that “People who have a plan tend to feel more confident overall, even in the face of a double-dip recession. Seventy-four percent of those with a plan say they are prepared for a second downturn, compared to 41% of those without a plan.”