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Retirement Preparedness and Savings Choices in 2005-2009

In this research brief, we first present some of the long-term trends in retirement preparedness and saving choices that may be glimpsed from aggregate national data for 1952–2008 and the first few quarters of 2009.

Executive Summary

Retirement Preparedness and Saving Choices in 2005–2009 is the fifth report in a series of Consumer Finance Research briefs based on information derived from the Ohio State University’s Consumer Finance Monthly (CFM) survey.

This research brief explores whether a tumultuous economic environment impacts the retirement preparedness of Americans. We examine:

  • A market analysis of retirement preparedness, saving choices, and general trends from 1952 to 2009.
  • CFM household data including net worth, household income, and the net worth to income ratio.
  • CFM household data components of net worth and saving choices.
  • A key set of strategic implications for credit unions based on the research findings.

What is the research about?

Our key finding: not much has changed. The value of real estate assets and investments in complex products (e.g., mutual funds and bonds) fell, while Americans of all ages hoard their cash. But despite the deepest economic recession in the modern economy, there has not been a large change in Americans’ retirement preparedness. The findings may be remarkably unremarkable, but there are still significant strategic implications for credit unions. Credit unions have a storied past of being banks for beginners. 

This research identifies an opportunity for credit unions to suit up and manage a critical life event for members, the accumulation and de-cumulation stages of retirement. Americans may or may not be prepared to retire, but credit unions can position themselves to help members prepare and navigate this critical life event.

What are the credit union implications?

Now is the time for credit unions to assess how to become involved in the preparation for and the actual retirement life event. Perhaps you’re looking to serve an emerging Hispanic group in your market, or maybe your core membership comprises a corps of high school–educated workers on the verge of retirement. This report helps you plan. The recent financial crisis has opened the door for many Americans to reconsider both their financial goals and the institution that helps to achieve them.