The economy is still recovering from the recession of 2008 and 2009, with unemployment still at an astounding 7.6%. Unemployment spent the years prior to the last recession ranging from roughly 4% to 6%.
The payroll tax hikes that kicked in at the beginning of 2013 are weighing on employers and consumers as well. They're enough to curtail incomes and that, in turn, will significantly dampen consumer spending.
The 2014 recession may not be as deep as the last one, but it will most likely be longer, because the Fed is running out of options. Think about it. What can the policymakers do to fix the problem this time? They won't, and the markets will be hit hard when the economy tanks, so we're entering a new world of investing.
Those who are aged 40 to 60 already suffered a recession, during which they saw their net worth cut in half in just 12 to 18 months. They have most likely pushed out their retirement dates as a result, and they're inventing more cautiously because they are experienced enough to know that anything that happened before can happen again.
Those who are aged 60 and older were affected the most by the last recession. Most didn't factor a stock market collapse and a 1.5% yield on U.S. Treasuries into their retirement plans. Some managed to enter retirement debt free and make the spending adjustments to make ends meet, but they may see their assets obliterated again. Those with debt, who could not retire, are in even worse shape.