7 key retirement trends for 2017 and beyond

  • The rebound marches on

    Romolo Tavani, Getty Images/iStockphoto

    The Great Recession and its aftermath created a perfect storm that battered the retirement plans of millions of older workers. Dramatically lower interest rates reduced interest income on savings and bonds, and significantly boosted annuity prices. To make matters worse, the stock market crashed and real estate values plummeted, causing many older workers to delay their retirements.

    But what came down can go up as well!

    Indeed, the stock market has since rebounded to new highs, and in many areas of the country, real estate has recovered as well. With luck, the economy will continue to recover, continuing the stock market run-up and providing boosts to real estate markets that have lagged.

    Interest rates are also starting to inch up after years of hugging the bottom. If those increases can continue without giving up recent gains in the stock and real estate markets, much of the damage caused by the recession might finally get undone.

    This could mean annuity prices might fall, retirees might be able to live on interest from savings accounts and bonds, and retirement might become affordable for older workers who are waiting for the economy to improve enough so they can retire.

    In light of these developments, older workers would do well to create a strategy for generating retirement income from their savings and track how much retirement income they might expect if these trends continue.

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    Steve Vernon helped large employers design and manage their retirement programs for more than 35 years as a consulting actuary. Now he's a research scholar for the Stanford Center on Longevity, where he helps collect, direct and disseminate research that will improve the financial security of seniors. He's also president of Rest-of-Life Communications, delivers retirement planning workshops and authored Money for Life: Turn Your IRA and 401(k) Into a Lifetime Retirement Paycheck and Recession-Proof Your Retirement Years.