Odds are that your nest egg is cracked, if not broken. Staying at or returning to work may be a necessity, not an option, assuming you can even find a job. Like people everywhere, you're tightening spending wherever possible, which is making the economy that much weaker in the short run. Meanwhile, inflation, the scourge of people living on fixed incomes, is not a problem right now. However, it seems likely to emerge as a serious concern after the economy struggles to its feet in 2010 or 2011. Don't act surprised when this happens.
These problems will be affected but hardly fixed by the evolving stimulus package of the incoming Obama administration. The stimulus plan's two-year price tag is expected to top $800 billion, and it's on its way to $1 trillion (and perhaps even more). Next year's budget deficit could exceed $1.5 trillion. If these figures seem irresponsibly large, toss a rock in just about any direction, and you'll hit both conservative and liberal economists who support an even larger 2009 version of the New Deal. So what stimulus programs would be good for older Americans? AARP recently issued seven stimulus priorities:
1) Expanded Unemployment Assistance. Data indicate when older, longer-tenured workers lose employment, it takes them longer to find the next job, and older jobseekers may be at greater risk than younger jobseekers of exhausting their unemployment benefits before finding a new job.
2) Expanded Federal Medicaid Support. Over half the states are facing budget shortfalls, and many are considering or are already implementing cuts to health care for people who cannot afford care on their own.
3) Food Stamps and Nutrition Support. A temporary increase in the Food Stamps allotment, as well as additional funding for other nutrition programs, would help ensure that an adequate nutrition safety net is available for the most vulnerable.
4) Weatherization Assistance Program Support. Increasing WAP funding could create new green jobs, provide weatherization assistance to low income households, and as a result, reduce monthly energy bills.
5) Enhanced Health Information Systems. Electronic medical record systems can provide the kind of immediate, valuable investment our economy needs. Health IT lays the groundwork for long-term economic growth.
6) Aid for Expanded Health Care Staffing. There are hundreds of thousands of good paying nursing jobs going unfilled largely because our nursing schools lack the faculty and capacity to educate enough students.
7) Transportation Infrastructure. Congress and the White House should provide substantial funding for transportation capital improvements to rebuild our nation's aging roads, bridges and transit systems and achieve national goals to reduce reliance on oil, expand mobility options and create new and sustainable "green" jobs.
Lurking beyond short-term needs are major entitlement, health, and retirement issues: repairing Social Security and Medicaid; reforming health insurance, which includes putting Medicare on a fiscal sustainability path; and altering 401(k)'s, IRAs, and other self-directed retirement accounts to seek smaller returns in exchange for more investor safety and reliability.
Largely unspoken amidst the current crisis is fiscal math that challenges our ability to invest in the future and still honor the retirement and health promises made to older citizens. The Coming Generational Storm, a 2004 book by economist Laurence J. Kotlikoff and journalist/financial adviser Scott Burns, lays out these stakes in detailed and sobering ways.
President-elect Barack Obama addressed the generational issue indirectly in his recent speech on the economy. If we fail to take decisive action, he says, "we could lose a generation of potential and promise, as more young Americans are forced to forgo dreams of college or the chance to train for the jobs of the future. And our nation could lose the competitive edge that has served as a foundation for our strength and our standing in the world." He says Americans should be asking not "What's good for me?" but "What's good for the country my children will inherit?" That's a particularly apt and tough question for older Americans who may face uncomfortable choices between their well-being and the longer-term prospects for their children and grandchildren.