Forecast Report Slides

Forecast 2010: Navigating retirement unknowns And charting a course anyway a retirement Security Institute report february 2010 www.retirementsecurityinstitute.com Tuesday, February 23, 2010

prelude to retirement forecast www.retirementsecurityinstitute.com Tuesday, February 23, 2010

prelude • China, one of our largest foreign creditors, expressed public chagrin at the U.S.’s ﬁscal mess for the ﬁrst time. • Returns on retirement portfolios were rising on the back of easy credit, thus leading to more debt. • The clean up continues, and will for many years, especially for those losing livelihoods or irreplaceable investments. www.retirementsecurityinstitute.com Tuesday, February 23, 2010

Economic Climate • The federal debt ratio to GDP is around 84%, up from 41% in 2008. • Experts say a tipping point is at the 90% mark, where debt servicing chips away at growth. www.retirementsecurityinstitute.com Tuesday, February 23, 2010

Economic Climate With a population aging more rapidly than the U.S.’s, Japan saw savings rates decline from 10% in the 1990s to 2.2% in 2007. U.S. rates were nearly zero in 2007. In 2009, after the largest financial crisis since the depression, Americans began saving more seriously, to a high of 6.0% in 2009. www.retirementsecurityinstitute.com Tuesday, February 23, 2010

demographics • Because of longevity prospects, Social Security beneﬁts will be delayed to age 67 for those born in 1960. • Late-period Boomers, Gens X and Y will receive lower replacement incomes than current retirees and older Boomers set to retire. www.retirementsecurityinstitute.com Tuesday, February 23, 2010

Parsing the Crisis New Evidence from research • There was a ﬂight to quality effect where large cap stocks served the role of an insurance policy. • Owning an asset that is more liquid like a large cap stock such as GE acts as a liquidity hedge during a downturn. • Small cap stocks proved less liquid, and their activity dropped 40% during the height of the crisis. www.retirementsecurityinstitute.com Tuesday, February 23, 2010

Forecast Report Slides

by Jennifer Warren on Feb 23, 2010

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Forecast Report Slides — Presentation Transcript

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