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Forecast Report Slides


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A set of 7 sample slides that accompanies the full report "Forecast 2010: Navigating Retirement Unknowns, and charting a course anyway."

Published in: Business, Economy & Finance
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Forecast Report Slides

  1. 1. Forecast 2010: Navigating retirement unknowns And charting a course anyway a retirement Security Institute report february 2010 Tuesday, February 23, 2010
  2. 2. prelude to retirement forecast Tuesday, February 23, 2010
  3. 3. 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. Tuesday, February 23, 2010
  4. 4. 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. Tuesday, February 23, 2010
  5. 5. 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. Tuesday, February 23, 2010
  6. 6. 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. Tuesday, February 23, 2010
  7. 7. 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. Tuesday, February 23, 2010