Those nearing retirement, but not yet retired, are experiencing the worst of the recession’s impact, according to a new Pew Research Center survey. Adults age 65 and older, most of whom have already retired and cut expenses, are the age group least worried about their finances, the telephone survey of 2,969 Americans conducted in February and March found.
Seniors were the least likely of all age groups to say they recently cut back on spending, suffered losses in their retirement accounts, or experienced trouble paying for housing or medical care. But to baby boomers between ages 50 and 64, this feels like hard times. Three-quarters of baby boomers, or what the Pew Research Center is calling the “threshold generation”, say the recession will make it more difficult for them to afford retirement, compared to two-thirds of younger adults and about half of older adults. That’s largely because baby boomer’s nest eggs were the most severely cracked by Wall Street’s meltdown. Some 61 percent of adults on the threshold of retirement say they lost money in the past year in mutual funds, individual stocks, 401(k)s, and other retirement accounts compared to only 28 percent of those between ages 18 and 29 and 36 percent of seniors age 65 and older. Even adults under 30, who still have decades to plan their retirement, were more concerned that the recession will hurt their ability to financially retire than those above age 65 (67 percent versus 56 percent).
Younger Americans under age 65 have taken more steps in the past year to cut expenses than senior citizens. While 60 percent of young and middle-aged adults are doing more shopping at discount stores, only 43 percent of those age 65 and older are. Those under age 65 are more than twice as likely as older adults to reduce spending on cable, cut back on alcohol and cigarettes, or plan to plant a “recession garden” to cut food bills.
Here are a few stats about how different age groups are experiencing the recession.
Age 18-49 Age 50-64 Age 65+
Cut back in spending 68 59 36
Had trouble getting/affording medical care 23 21 7
Lost money on investments 44 66 43
Say the recession will make it harder to retire 67 75 56
Say recession has caused stress in the family 52 58 38
Source: Pew Research Center, 2009.