The economic crisis has destroyed considerable American wealth, leaving employees – particularly older workers – much less confident in their ability to afford a comfortable retirement than they were two years ago. Those with a defined benefit (DB) pension plan, however, are much more confident in their retirement prospects than those with only a defined contribution (DC) plan. DC plan participants were heavily exposed to equities and experienced significant losses in their retirement accounts. Compounding matters, a number of older workers reduced their equity allocations after the crisis hit, locking in their losses and potentially missing a rebound in stock prices in the near term.

Given all of this, it is not surprising that retirement security is employees’ biggest concern. In response to the crisis, most workers are cutting back on daily spending and some are reducing their debt and increasing their savings to offset recent losses.