Financial crisis lingers for boomers, Generation X

3 mistakes that could ruin your retirement
3 mistakes that could ruin your retirement
Three easy ways to save for retirement
Three easy ways to save for retirement
When To Convert a Traditional IRA to Roth
When To Convert a Traditional IRA to Roth

Stock prices have nearly tripled since the depths of the financial crisis, and the unemployment rate has been almost halved. So you might think, nearly seven years on, that the stress of the financial crisis is behind us.

Not so fast.

Two-thirds of baby boomers and Generation X—67 percent, to be precise—report still feeling the effects of the financial crisis in their lives every day, from housing to the workplace to saving for retirement. (Tweet This)

Worse, one in five boomers and Gen Xers is experiencing post-crash skepticism, according to Allianz Life, which commissioned a study of the two cohorts. These people experienced at least six of 13 effects of the financial crisis, which include seeing their 401(k) lose value, losing their job and watching their house's value plummet. And it is still having a dramatic effect on their behavior.

These post-crash skeptics are far more cautious in everything from investing to homebuying, and they have been taking on more debt than the survey participants overall. In addition, 41 percent of them said they had stopped saving for retirement in the wake of the financial crisis, more than three times the average rate for boomers and Gen Xers generally.

"It kind of paralyzes them," said Katie Libbe, head of consumer insights at Allianz Life. "They are not behaving rationally. It's kind of like they've got this psychological stuff going on that has profoundly affected them in the past, so they are very, very worried about the future."

Retirement confidence is up, but why?

The survey included 1,000 Gen Xers, defined as people age 35 to 48, and 1,000 boomers aged 49 to 67, all with incomes of at least $30,000.

Many boomers were probably nearing retirement when the financial crisis struck, so with their retirement savings near their peak, boomers may well have had an outsize response to the market's free fall. Sure enough, more than half of the post-crash skeptics were boomers, Libbe said. But the average age of that group was 52, meaning they were 45, probably far from retirement, when the financial crisis hit.

These post-crash skeptics have distinct beliefs about their finances, Libbe said. For one thing, "this group is really distrustful of financial institutions," she said. And whether it is a result of their experiences in the recession or their cautious investing approach, "they really believe that they have to use debt as a survival tool," though in reality it is interfering with their ability to save for the future. Half of the post-crash skeptics said they took on more debt after the crash, compared to 27 percent of Gen Xers and just 19 percent of boomers.

How much do you really need for retirement?

The post-crash skeptics are not the only ones poorly prepared for retirement, however. According to the Employee Benefit Research Institute's 2015 Retirement Confidence Survey, just 22 percent of workers are very confident that they have sufficient savings for a comfortable retirement.

The Government Accountability Office, for its part, analyzed the Federal Reserve's Survey of Consumer Finances and found that roughly half of all households age 55 and over have no retirement savings at all, and many of those have few other financial resources.

Allianz found troubling behaviors among the Gen X respondents generally. They have about 60 percent more mortgage debt and about 82 percent more nonmortgage debt than boomers, but 59 percent say they are comfortable with those levels.

Can a doctored photo save your retirement?

The silver lining, Libbe said, is that the post-crash skeptics seem to be relatively open to receiving financial advice. "They now recognize that if someone could come along who would not judge them—if they could find an advisor who could lead them slowly back into the market, they really like that scenario."

Apart from advisors, Libbe pointed to a few simple steps people can take to repair their finances. For starters, you will stop taking on debt if you start living on a "cash flow" basis, or spending only what you earn. It is also a good idea to take advantage of retirement plan matches and any systematic retirement savings options your employer offers, such as automatic enrollment in a retirement plan. Building an emergency fund is another good idea, Libbe said.

"Sometimes people say, 'I'm never going to be able to retire,' " she said. "That's not a reason not to put money away for savings."