Canadian Boomers still in shell shock from U.S financial crisis

It has been almost three years since the onset of the U.S financial crisis of 2008.

The U.S subprime crisis and U.S. stock market decline of 57% by March 9th, 2009 appears to be too much for the baby boomer generation according to a recent TD Investor sentiment survey.[1]

Key findings of the survey:

 - Two thirds of Canadians are investing less than they did prior to the 2008 downturn

 - 27% said they were investing less because they were discouraged by market volatility

 - 24% said they had more important things to do with their money than invest for their retirement

The sentiment findings are remarkably downbeat even considering that the market has recovered 100% from its lows and investor portfolio statements have shown considerable improvement in the last two years.

The advisor.ca article [2] citing the survey results comments that "In broad strokes, boomers have spent much of their lives embracing risk. ... But they may be losing their risk appetite at a critical stage on that journey—the years just before they retire."

 As TD was the sponsor of the study, what was TD Canada Trust's advice?

 - The best tactic might be to continue retirement savings contributions, even if at a lower amount.

- determine your risk tolerance; find a low minimum purchase investment; and set up a PAC.

Although I would largely agree with the bank's sage advice it would be very easy to fall into the trap of apathy. The argument being if investors are currently in a somewhat depressed mood, we should gently remind our clients to continue to save and invest. 

Based on the alarming results of this survey it is time to take action. As a boomer myself, our visions of eternal youth are hard to shake and retirement always seems far away. Aging boomers will likely suffer the cultural shock of impending retirement all at the same time. Yes, age 60 is rapidly approaching for the middle boomer and the oldest boomers are retiring right now. If we don’t save, what are we going to retire on? 

The moral of the story? Ok boomers - it is not too late just yet. Start saving once again! 

[1] The TD Investor Sentiment Survey results were collected through an online survey by Environics Research Group from May 18 – 25, 2011. A total of 1,000 surveys were completed by investors aged 45-64. 

[2] Advisor.ca "Boomers remain shaken shaken by 2008 rout - Steven Lamb, June 21, 2011