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Retirement Security and the Stock Market Crash: What Are the Possible Outcomes?

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  • Barbara A. Butrica
  • Karen E. Smith
  • Eric J. Toder

Abstract

This paper simulates the impact of the 2008 stock market crash on future retirement savings under alternative scenarios. If stocks remain depressed as after the 1974 crash, 20 percent of pre-boomers born 1941-45 and 22 percent of late boomers born 1961-65 would see their retirement incomes drop 10 percent or more. Working another year would reduce the share of these big losers to 14 percent for late boomers. Because most pre-boomers were already retired, their share of big losers would decline slightly, to 19 percent. Delaying retirement would disproportionately benefit low-income people because their additional earnings exceed their stock market losses.

Suggested Citation

  • Barbara A. Butrica & Karen E. Smith & Eric J. Toder, 2009. "Retirement Security and the Stock Market Crash: What Are the Possible Outcomes?," Working Papers, Center for Retirement Research at Boston College wp2009-30, Center for Retirement Research, revised Nov 2009.
    • Handle: RePEc:crr:crrwps:wp2009-30
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    File URL: http://crr.bc.edu/working-papers/retirement-security-and-the-stock-market-crash-what-are-the-possible-outcomes/
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    Cited by:

    1. Gopi Shah Goda & John B. Shoven & Sita Nataraj Slavov, 2012. "Does Stock Market Performance Influence Retirement Intentions?," Journal of Human Resources, University of Wisconsin Press, vol. 47(4), pages 1055-1081.
    2. Emma Aluodi & Amos Njuguna & Bernard Omboi, 2017. "Effect of Financial Literacy on Retirement Preparedness among Employees in the Insurance Sector in Kenya," International Journal of Business and Management, Canadian Center of Science and Education, vol. 12(10), pages 242-242, September.

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