Recession Has Altered American Savings Outlook
The spending drop will equate to an approximate 10% drop, or more than $1 trillion annually, in GDP, according to a press release of the survey results.
In addition, survey respondents indicated this new, lower level of spending is structural and could last for nearly a decade after the recession ends, according to the results. Seventy-seven percent of those surveyed said that even post-recession they plan to wait for sales; 66% said they plan to buy less in general; and 58% said they plan to buy less-expensive things.
On the savings front, the survey revealed that once the recession ends, Americans plan to save 14% of their total earnings—with the replenishment of their 401(k) and other retirement savings their biggest long-term concerns. AlixPartners pointed out that the U.S. Bureau of Economic Analysis shows Americans saved 1.6% of their total earnings in 2008 and just 1.4% on average for the decade prior.
Survey participants estimated that their retirement savings have dropped an average of 25%, and almost a quarter of those polled (22%) said they now plan to retire later than previously expected. Among that number, the expected retirement age jumped 3.6 years to older than age 65. When asked why they now expected to retire later, 30% cited loss of savings or retirement.
AlixPartners said that the huge Baby Boomer generation—once thought to be moving into the years in which they would be spending their retirement savings—might instead be accounting for more than a third (35%) of total dollars saved by Americans post-recession.
Eighty-two percent of those polled say they will use upcoming government tax rebates not to stimulate the economy via immediate spending, but instead will save that money or use it to pay down personal debt. Those planning to save the stimulus money reported they would be keeping that money in savings for three years on average.
The AlixPartners Long-Range Economic Outlook survey was conducted February 19 to March 3, among 5,031 people.