January 6, 2009 / 3:26 PM / 10 years ago

Econ slump hitting older Americans hard, AARP says

WASHINGTON (Reuters) - The recession is hitting older Americans hard, forcing many to cut back on contributions to retirement accounts and extras like entertainment and restaurant meals, AARP officials said on Tuesday.

An elderly man walks with his cane amid shoppers at the Glendale Galleria shopping mall on Black Friday in Glendale, California November 28, 2008. REUTERS/Fred Prouser

A survey of Americans aged 45 and older conducted for the AARP, an influential advocacy group for people over 50, found many had suffered savings and investment losses, are having trouble paying for essentials such as food, gas and medicine and are planning to postpone retirement.

“The economic downturn last year hit our members hard,” AARP CEO Bill Novelli told reporters.

The 40-million member group said it is working to ensure the stimulus package being developed by President-elect Barack Obama includes help for the unemployed and aid to cash-strapped states for health care.

The group is also seeking help for homeowners facing bankruptcy, money for job training in health care professions, and aid for doctors and hospitals to upgrade health information sharing technology.

The group said it also is seeking long-term economic improvements such as broad health care reform aimed at controlling costs and improving care.

“We cannot fix the economy with out fixing health care,” said AARP Executive Vice President Nancy LeaMond.

Obama has made overhauling the U.S. health care system a major priority, and AARP is part of a coalition that includes business and union groups that is pushing to ensure that health care reform that controls costs and improves care remains at the top of the new administration’s agenda.


The recession officially began in December 2007.

The survey of 1,097 people aged 45 and older was conducted in December by Woelfel Research. About 91 percent of those surveyed said the U.S. economy was in bad shape, compared to 81 percent the previous April.

More than half of those surveyed, 55 percent, said they were worried about paying for health care and about one third expressed concern about paying the mortgage or rent, the survey said.

Nearly 60 percent of those surveyed said they suffered investment losses last year. A majority of those who suffered financial losses and are still in the work force said they plan to postpone retirement. About 57 percent of those aged 45-54 and about 63 percent of those aged 55 to 64 said they expected to work longer because of financial losses.

About 68 percent of those surveyed last month had cut entertainment spending and 64 percent were eating out less.

About 52 percent had difficulty covering basic expenses like food, gas and medicine last year.

Thirty-six percent of those surveyed stopped putting money into a 401K or other retirement saving account while 17 percent prematurely withdrew retirement funds, the survey said.

Editing by Alan Elsner and Philip Barbara

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