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2008 Recession Still Haunts Retirement Savers Worried About a Repeat

Posted By Isaac Nuriani |

 

Households all across the country saw the value of their retirement accounts sink when the 2008 recession took its toll on financial markets. Wage earners in a number of these households also lost their jobs during the downturn. Many of ultimately were unable to continue making contributions to their plans, and some had to tap their accounts to make ends meet. 

One of the many consequences of the 2008 recession and financial crisis is that the number of families with any retirement savings at all is down from 2007. This shows that the multidimensional impact of a comprehensive financial crisis can plague your portfolio permanently – another reason it’s important to protect your retirement account with alternative assets such as physical gold and silver. Precious metals’ demonstrated capacity to strengthen during crises can help ensure the overall effect of recession-related challenges on your portfolio is smaller than it might be.

Median Net Worth of Pre-Retirement Households Fell by Half in Recession’s Wake

Many savers recovered fully from the 2008 recession – and then some – from the effects of the 2008 financial crisis. But many have not, and after the last 10-plus years of “recovery” and juiced-up, record-level markets, some may be puzzled that an IRA or 401(k) that was in good shape in 2007 is struggling 12 years later.

The truth is, for retirement savers, there can be more to recessions than immediate impact on a portfolio’s value. For example, the nation’s greatly weakened financial profile typically results in persistently high unemployment. This condition not only limits citizens’ ability to continue making contributions to retirement accounts, it can force families to reach into those retirement accounts for money they need to live.

On that note, a recent CNBC.com article by Laurie Konish about ongoing recession-related challenges for retirement savings cites “the very slow recovery” plaguing accounts since 2008. “Retirement savings haven’t recovered from the recession,” says Konish bluntly, despite all of the “good news” generated by financial markets in the last 10 years. According to Konish, “American families are saving less in their workplace retirement savings plans than they were before the Great Recession.”

A particularly illustrative piece of data comes from Monique Morrisey, an economist at the Economic Policy Institute, a non-partisan think tank. Morrisey told Konish that “the median net worth of households approaching retirement essentially fell by half in wake of the recession and has only slightly improved since then.”

Those curious as to why median net worth remains depressed after years of robust markets following the 2008 recession must look past soaring indexes for the answers.

According to a recent survey from Magnify Money, more than half – 52% – of all Americans have taken early withdrawals from their retirement plans. The overwhelming reason for doing so is to pay off or pay down debt. Other leading reasons for tapping retirement plans early include paying for college and covering medical expenses.

“When a downturn hits, the temptation is to pull back on savings or withdraw money from those accounts,” writes Konish. It can be difficult to build – or rebuild – significant retirement savings if you’re unable to gain the upper hand in your day-to-day financial existence after an experience like the 2008 recession. But if you’ve also left your portfolio entirely vulnerable to the extreme volatility that can torment economies and markets, your chances at ever realizing a successful retirement could be dashed forever.

Physical Gold and Silver Can Help Maximize Your Savings, Come What May

The long-term effect of economic “life events” on retirement savings can be mitigated if your retirement portfolio is allocated in such a way that it remains stable – even productive – during financial crises. Fortunately, precious metals are fundamentally uncorrelated with mainstream assets and have a demonstrated record of strengthening during precisely the kinds of conditions we’re discussing.

While popular risk assets were struggling to gain traction during the years of the global recession, gold and silver were practically putting on a show. From 2008 to 2011, while much of the world was still mired in misery, gold jumped 110% and silver jumped even higher, climbing nearly 400% during those years.

If you’re ready to learn more about securing your portfolio with safe-haven assets, I invite you to call award-winning Augusta Precious Metals at 800-700-1008 for assistance. You’ll speak with a knowledgeable and friendly gold and silver professional who will patiently answer all of your questions and provide you with everything you need to know to begin buying precious metals – including how to do so in a gold IRA.

While you’re on the phone, find out if you qualify for Augusta’s revolutionary Profit & Protect Web Conference. This is a live one-on-one web presentation hosted by our resident economic analyst Mr. Devlyn Steele. His track record of success includes accurately predicting both the 2008 financial crisis and the surge in gold and silver that followed shortly afterward. The Profit & Protect Web Conference will not only inform you of the most compelling threats to your financial security but also demonstrate how they can be mitigated with gold and silver.

There’s no reason to idly stand by and let your unprotected portfolio suffer the potentially devastating effects of something like the 2008 recession or even a full-blown financial crisis. Add physical gold and silver to your holdings, so you can take a giant step toward ensuring your financial security.

Augusta cannot guarantee, and makes no representation, that any metals purchased by a customer will appreciate at all or appreciate sufficiently to make a profit, and there is no certainty that any metals can be sold for a profit. The future value of the coins you purchase cannot be predicted. You could lose money. Don't purchase Augusta products with money you can't afford to lose. Prices may rise and fall over time or rapidly. Past performance of any coin does not guarantee future results. Premium coins are sold for more than the value of the precious metal they contain. Augusta's prices and buy-back prices are determined and controlled by Augusta. This purchase is speculative and unregulated.